Maryland Prepaid College Trust calculation error leaves families in limbo
By Tommie Clark
Click here for updates on this story
BALTIMORE (WBAL) — A state agency that offers savings plans to help families pay for college is experiencing issues.
Multiple families tell 11 News that their Maryland 529 accounts are frozen.
Maryland 529 says they’re working with an auditor to resolve an ongoing error.
But parents say they can’t wait any longer.
“It’s just really frustrating. Very frustrating,” Monica Heinlein said.
Heinlein has had a Maryland 529 Prepaid College Trust for nearly 15 years. It helped her send both of her sons to college. Ahead of the new school year, she requested funds be rolled over to her investment plan. That was five months ago. It still hasn’t happened.
“You know, it’s a lot of money to pay for college for people like myself. It’s expensive. And that’s why I saved for all these years,” Heinlein said.
Right now, she can’t move that money, and she’s not alone. In fact, 30,000 accounts are enrolled.
Monday, 529 posted an explanation online. It says the board temporarily suspended the addition of certain interest earnings. It comes after a software switch led to an “interest calculation error.”
Now, they’re working with an audit firm to fix it. 529 says no earnings will be lost, only delayed, but as the school year kicks off, parents say that’s the issue.
A family of a part-time college student, choosing to stay anonymous, says they sent an email to 529 sharing their concern writing, “…as a parent of a college student that set this plan up, with no access to these funds, how are we supposed to pay tuition?”
For those who are not directly affected, the balance shown in their account may be incorrect Either over-estimated or under-estimated.
Heinlein says she was told the issue would be resolved by Aug. 30. Another family says they were told October.
“I’m probably going to have to either put the balance on a credit card or take it out of another separate savings account that is not earmarked for college and hope that it gets resolved and we get our money out,” Heinlein said.
In a statement to 11 News, 529 says in part, “The Maryland Prepaid College Trust is currently paying tuition benefits, but some interest earnings may not be immediately available.” And, “We recognize the uncertainty caused by this issue and are working diligently to reach a resolution.”
529 says there should be no impact on investment accounts.
The next board meeting is Thursday, Sept. 15.
Please note: This content carries a strict local market embargo. If you share the same market as the contributor of this article, you may not use it on any platform.
