Lawmakers to hold hearing on Maryland 529 savings account issues
MARYLAND - Maryland lawmakers are calling for answers after hundreds of parents say they could not access funds in their Maryland 529 college savings account to pay for school expenses.
The University System of Maryland, which oversees the state's public colleges and universities, said they are well aware of the problem, which caused parents to falsely believe there was more money in their accounts than there actually was.
To help, officials are working with students and families to help reduce the hardships that losing access to their accounts has created.
Brian Savoie has been saving money with Maryland 529's prepaid college trust program since his son was about 7 years old. Last year, his family decided they could send his son to Purdue University, despite the out-of-state costs, after reviewing what he thought was an accurate amount in his Maryland 529 account. However, as it turns out, that number was incorrect.
"When I went to pay my first bill, I was told that the earnings on the account which in my case was about 40 percent of the account value was no longer available to me and that the situation would be resolved," said Brian Savoie.
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Savoie adds that the situation is still not resolved today. He says that he will now have to have a tough conversation with his son halfway through his freshman year at Purdue.
"I made a commitment to him to make sure at least his undergrad was taken care of but as this issue has spun more and more out of control I've had to bring him in and have conversations about if this money doesn't come in, what are we going to need to do," said Savoie.
Maryland 529's Executive Director Anthony Savia says the error occurred while distributing additional earnings to account-holders in 2021. He says the calculation for distributing those earnings was inaccurately reported and had to be corrected by compliance. The error impacted at least 480 account-holders.
Savia says his team has addressed the situation with 419 of those accounts.
Maryland lawmakers will address the issue on Thursday at a House Appropriations hearing.