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COLLEGE SAVINGS PLANS OF MARYLAND BOARD

ORIGIN & FUNCTIONS


In 1997, the College Savings Plans of Maryland Board was created as the Maryland Higher Education Investment Program Board (Chapters 110, 111, Acts of 1997). It was renamed the Maryland Higher Education Investment Board in July 2000 (Chapter 494, Acts of 2000), and adopted its present name in July 2003 (Chapter 382, Acts of 2003). The Board oversees the College Savings Plans of Maryland, including the Maryland Prepaid College Trust and the Maryland College Investment Plan. A Maryland Broker-Dealer College Investment Plan has been authorized, but not yet implemented. The plans function under Section 529 of the federal Internal Revenue Code, which allows states to establish and administer tax-deferred college savings plans.

Ten members constitute the College Savings Plans of Maryland Board. Five are appointed to four-year terms by the Governor. Five serve ex officio (Code Education Article, secs. 18-1901 through 18-1916).


Maryland Prepaid College Trust. The Maryland Prepaid College Trust was established by the Board in 1997 to hold investments. Under the Trust, Maryland and District of Columbia residents may prepay tuition for a college education. At Maryland public colleges and universities, the Trust is designed to pay the equivalent of the in-state student tuition and mandatory fees. This is accomplished through the purchase of tuition contracts by which the purchaser enters into a contract with the Board and makes payments in advance of enrollment. Benefits also may be applied to the tuition costs at any accredited private or out-of-state college (Code Education Article, Sec. 18-1903).

Maryland Broker-Dealer College Investment Plan. In 2008, the Maryland Broker-Dealer College Investment Plan was authorized (Chapter 548, Acts of 2008). When the Plan is established, Maryland Families will be able to invest in college savings plans using private investment advisors. From their taxable income, Maryland taxpayers will be allowed to deduct plan contributions for purposes of State and local income taxes (Code Education Article, secs. 18-19B-01 through 18-19B-08).

Maryland College Investment Plan. The Maryland College Investment Plan formed in July 2000 (Chapter 494, Acts of 2000). To save for college, contributors establish a mutual fund investment account on behalf of a qualified designated beneficiary. The Plan is managed and distributed professionally through a contract with the State and any investment earnings in an account are exempt from State and federal tax if used for tuition, housing, books, and other eligible higher education expenses. Maryland residents and nonresidents may participate in the Plan (Code Education Article, secs. 18-19A-01 through 18-19A-07).

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