What happens to the money left in the account after the beneficiary has completed his/her post-secondary education or if the beneficiary decides not to attend college or does not finish college?
Several options are available: a) Funds may be left in the account for the current beneficiary in the event he or she returns to school. b) Another member of the beneficiary’s family can be designated as the new beneficiary. c) The money in the account can be withdrawn; but, if not used for qualified higher education expenses, the earnings will become subject to Arizona state income tax for Arizona residents. In addition, earnings will be subject to federal income tax and a federally mandated 10 percent penalty. d) A rollover distribution may be requested.
Several options are available: a) Funds may be left in the account for the current beneficiary in the event he or she returns to school. b) Another member of the beneficiary’s family can be designated as the new beneficiary. c) The money in the account can be withdrawn; but, if not used for qualified higher education expenses, the earnings will become subject to Arizona state income tax for Arizona residents. In addition, earnings will be subject to federal income tax and a federally mandated 10 percent penalty. d) A rollover distribution may be requested. 40. Are there any fees to open the account? There is a one-time $10 application fee per mutual fund account. This will be forwarded to the Commission for administrative costs of the Program. 41. If I open an account, will the beneficiary still be eligible for financial aid? There is no guarantee that a student will be eligible for financial aid, whether they participate in a savings program or not. Any student loan program, student g
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