ABOUT THE TRUST
The University of Alaska has served as the trustee for the Education Trust of Alaska and its 529 plans for the last two decades, with high-level oversight provided by its Board of Regents. The Board of Regents ensures strong governance through tenured staff, meticulous due diligence of its program management and investments, annual external audits conducted by PwC, and independent investment consultation with Callan Associates.
ALASKA HELPED LEAD THE WAY
During the 1980’s, universities across the U.S. were experiencing rampant tuition inflation. States began working together to come up with creative ideas to address this issue, to keep higher education affordable for residents. Jim Lynch, then UA Associate Vice President for Finance, led the effort for Alaska and played a critical role in developing a solution both locally and nationally. It was clear that the cost of higher education would continue to rise and that families would need a way to prepare for it. The solution that states were arriving at was to offer specialized savings vehicles to residents along with advice to start saving as early as possible.
ADVANCE COLLEGE TUITION
In 1991, the University of Alaska launched Advance College Tuition, a prepaid program that allowed families to purchase University of Alaska tuition credits at current rates for future use.
This successful program was one of the first of its kind. It had a unique relationship with the Alaska Department of Revenue; residents could elect to purchase UA tuition credits automatically with their annual Permanent Fund Dividend (PFD).
CONGRESS APPROVES SECTION 529
Throughout the 1990s, states continued to work together to gain more benefits for their residents and lobbied congress to secure federal tax benefits for families saving for college. In 1996, congress approved section 529 of the Internal Revenue Code which allows families to save in a tax-advantaged way. Today, 529 contributions are invested in accounts that grow on a tax-deferred basis and are tax-free when used for qualified education expenses.
THE EDUCATION TRUST IS ESTABLISHED
In April 2001, the Education Trust of Alaska was created, with the University of Alaska serving as trustee. That month, the trust launched three 529 plans: the University of Alaska College Savings Plan, the T. Rowe Price College Savings Plan, and John Hancock Freedom 529. (The University of Alaska College Savings Plan was renamed Alaska 529 effective October 15, 2019.) The original Advance College Tuition program was modified and converted into what is now, the University of Alaska Portfolio in Alaska 529.
THE TRUST SEES GROWTH
The trust has seen significant participation and continues its partnership with the Alaska Department of Revenue. Approximately 13,000 Alaskans automatically contribute at least half of their PFD to a 529 account each year. In its three 529 plans, the trust currently holds approximately $10 billion in assets invested for more than 300,000 beneficiaries across the country and supports dozens of partners that promote literacy, learning, and education planning.
LOCAL IMPACT, NATIONAL REACH
Today, the trust has offices in Fairbanks and Anchorage. Because of its relationship with the University of Alaska system, it is able to offer a special benefit to all families saving in one of its three 529 plans. Plan account holders and beneficiaries (of two or more years) from any state are invited to attend the University of Alaska at in-state tuition rates.