Saving for Education with an Oregon 529 Plan
Learn how Embark, Oregon's 529 education savings plan, can help your family save for college, K-12 tuition, trade school, apprenticeships, and professional credentials.
Oregon 529 Plan Basics
A 529 plan is a tax-advantaged account designed to help families save and invest for education. Oregon's 529 plan is called Embark, formerly known as the Oregon College Savings Plan. Earnings grow tax-deferred, and qualified withdrawals are federal income tax-free.
How can the 529 plan funds be used?
What can't you spend 529 Funds on?
General Electronics & Cell Phone Plans
Transportation & Travel
*More than $10,000 in Student Loan Repayment (see the Secure Act)
Insurance
Sports & Fitness Club Memberships
*Secure Act 2.0 allows 529 plans to be used to repay student loans with a lifetime limit of $10,000. Employers can match payments.
What if you can't or don't use the money?
Advantages of 529 College Savings Plans
Age Based Investment Options
529 Plans often employ age based investment options. As your child ages, assets are automatically transferred into more conservative funds. This allows you to automatically manage your level of risk as your child approaches college age.
Federal Tax Advantages
Tax deferred growth & qualified expenses are tax free.
Unlimited Participation
Anyone can open an account, regardless of income-level or relationship.
High Contribution Limits
Most plans have lifetime contribution limits of $400,000 and up (limits vary by state).
Flexibility
You can change the beneficiary to a qualified family member anytime.
Managed Investment Options
Each state plan offers professionally administered portfolios.
Accelerated Gifting
529 savings plans offer an estate planning advantage in the form of accelerated gifting.
Wide Use of Funds
Private elementary through high school tuition. You can withdraw up to $20,000 per year to pay for private school tuition.
Transfer to ABLE account
ABLE accounts are tax-advantaged and can be used for individuals whose disability began before age 46
A 529 Plan's Current Impact on FAFSA
Parental assets
529 plans owned by a dependent student or by a parent are reported as parental assets on the FAFSA.
Asset Protection Allowance
The FAFSA Simplification Act eliminated the parent asset protection allowance. All reportable parental assets count toward the Student Aid Index (SAI).
Maximum of 5.64%
A maximum of 5.64% of parent-reported assets is included in the SAI calculation.
Grandparent-owned 529s
Under the new FAFSA, distributions from a 529 plan owned by a grandparent (or anyone other than the parent or student) are no longer reported as student income, which used to reduce aid eligibility by up to 50% of the distribution amount.
Source: U.S. Department of Education, studentaid.gov (FAFSA Simplification Act).
Oregon 529 Plan Tax Credit
Why not save on taxes while saving for college?
Oregon Residents
may qualify for up to a
$380 Tax Credit
for making contributions to a 529 account in 2026
Source: Oregon Department of Revenue, oregon.gov/dor (2025 and 2026 credit limits).
This is how it can work!
Contributions made to an Oregon 529 College Savings Plan may allow you to qualify for a tax credit! To see how this works, take a look at the visual below (note these are numbers from 2025 rules).
Anyone who contributes to an Oregon Embark 529 account, including parents, grandparents, aunts, uncles, and family friends, may claim the Oregon refundable tax credit on their own Oregon return. The percentage of your contribution that qualifies for the credit is tiered by adjusted gross income, with lower-income filers receiving a higher percentage. Only contributions to Oregon's Embark plan qualify for the Oregon credit; out-of-state 529 plan contributions do not.
What are some alternatives to 529 Plans?
529 College Savings Plans | Custodial Accounts (UGMA/UTMA) | |
|---|---|---|
Minimum Contribution Limit | Initially $25, $5 for subsequent contributions | None |
Federal Tax Benefits | Tax-free withdrawals for qualified expenses | First $1300 of unearned income is tax-free and the next $1250 is taxed at the child’s tax rate. Unearned income of more than $2300 will be taxed at the parent's rate (2024) |
State Tax Benefits | Up to a $360 tax credit for Oregon resident contributors (2025) | None |
Contribution Limits | $400,000 and up (varies by state) | Unlimited, but gift tax may apply |
Who Can Contribute | Anyone | Anyone |
Usage of Funds | Qualified educational expenses | Wide use |
FAFSA Considerations | Considered an asset of the parent equating to substantially lower SAI requirements | Considered an asset of the child, equating to substantially higher SAI requirements |
Disability | Can transfer to an ABLE account | None |
Sources: Internal Revenue Service (IRS) (kiddie tax thresholds, 529 federal tax treatment); Oregon Department of Revenue (Oregon credit limits); U.S. Department of Education (FAFSA SAI treatment).
How T. Mann Financial Can Help
Let T. Mann Financial help you choose the right savings path for your family.
Which college savings approach is right for you?
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We estimate potential education costs across the paths your child may take.
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We discuss alternative scenarios with the family to form clear, written goals.
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We help you select the account type that fits those goals.
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We build those costs into your overall financial plan.
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We recommend contribution levels and timing.
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We support you with ongoing decisions on adjustments, distributions, and rollovers.
It's easier to plan for education costs when there's time on your side. Whether your child is a newborn or a high school junior, T. Mann Financial can help you build education savings into your overall financial plan.