Promise Scholarships FAQ
COMMUNITY FOUNDATION PROMISE SCHOLARSHIPS
FREQUENTLY ASKED QUESTIONS
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What are Promise Scholarships?
- Promise Scholarships are financial awards that help Wabash County students pay for college or career training after high school. Students earn scholarships by completing in-class learning assignments and career or college going activities, and by depositing money into their Promise 529 savings accounts. The scholarships are deposited into the Promise Scholarship accounts of Wabash County students who have Promise 529 savings accounts.
Is there a difference between Wabash County Promise and Promise Scholarships?
- Yes. Wabash County Promise is for K-3 students in Wabash County Schools and is administered by the Wabash County YMCA. Its goal is to encourage students to see themselves pursuing career or college education beyond high school, and to encourage them to build assets to pay for this training by opening and regularly contributing to the students’ Promise 529 savings account. To participate, students must have a Promise 529 savings account.
- Promise Scholarships are administered by the Community Foundation of Wabash County. The Promise Scholarships program continues to promote a college going identity in 4th-8th grade Wabash County students. Students learn that their future depends on working hard in school as they earn scholarships for doing their reading, math, language arts, and career or college preparation activities. They can also earn savings matches for depositing money into their Promise 529 savings accounts. To participate, students must have both a Promise 529 savings account and a Participation Agreement signed by a parent or legal guardian.
How is this program different from other scholarship programs?
- Unlike most programs, students earn Promise Scholarships during their 4th-8th grade years.
Why are Promise Scholarships awarded to students so many years before college and career training actually begin?
- Research shows that when children know they have a college savings account, they are three times more likely to pursue education beyond high school. By awarding scholarships early -- that is, while in school instead of upon graduation -- Promise Scholarships help students accumulate funds to pay for post-secondary education and encourage a college-going identity, one that says, “I can pursue the career and education I need.” Earning scholarships, building assets, and reaching for goals increases the likelihood that students will complete education beyond high school.
How are Promise Scholarships earned?
- Students earn small scholarships for doing in-class activities that are already part of the curriculum. The students are expected to do this work anyway, and Promise Scholarships simply offer added motivation to do so. Students also earn savings matches for depositing money into their Promise 529 savings accounts.
Who develops the criteria by which scholarships are earned?
- The Community Foundation of Wabash County works with local educators to develop scholarship criteria based on research about what motivates students to reach for their goals. Students strive to reach benchmarks in three areas: academic growth, savings, and career or college planning activities such as making a college visit or filling out a practice FAFSA.
How are Promise Scholarships awarded?
- Each quarter, teachers report to the Community Foundation whether their students have completed the activities that are associated with Promise Scholarships. Each semester, the Community Foundation mails a statement to participating families summarizing the student’s achievements for that semester.
Who is eligible?
- Any student in grades 4-8 who attends school in Wabash County is eligible after these two conditions are met:
1. An adult opens a Promise-linked direct CollegeChoice529 savings account with the student as the beneficiary
2. A parent signs the Participation Agreement form
What if the student lives outside of Wabash County but attends school inside Wabash County?
- All students who attend a school in Wabash County are eligible regardless of where they live.
What can Promise Scholarships be used for?
- Promise Scholarship funds can be used for qualified educational expenses, including tuition, fees, textbooks, and certain room and board expenses. Promise scholarship funds can be used at any institution that accepts federal dollars: two- and four-year colleges, graduate schools (including law and medical), and vocational or technical schools.
How do I use my Promise Scholarship to pay for college expenses?
- After you graduate from high school and enroll in a training program, contact the Community Foundation with a bill or statement showing how much you owe the college or technical school. The Community Foundation will grant funds from scholarships that you earned to pay the school directly.
How are Promise Scholarships protected from misuse?
- Students cannot withdraw funds directly from the Promise Scholarship account. To access scholarships, students must show the Community Foundation proof of enrollment in a qualified institution before the Foundation distributes the scholarship funds. All scholarships are sent directly to the school or program in the student’s name.
What is CollegeChoice 529?
- CollegeChoice 529 is a Section 529 plan offered by the Indiana Education Savings Authority. Ascensus Broker Dealer Services, Inc. serves as the Program Manager. CollegeChoice 529 is designed to help individuals and families save for college in a tax-advantaged way and offers valuable advantages including tax-deferred growth, generous contribution limits, and attractive investment options.
Are investments guaranteed?
- No. Investment returns will vary depending upon the performance of the Portfolios. Depending on market conditions, you could lose all or a portion of your investment.
How do I open a Promise CollegeChoice529 account?
- There are two methods.
1. Does not require an initial deposit -- The preferred method is to complete a paper form available from the Community Foundation of Wabash County or your child’s school. To ensure proper tracking, mail or bring the completed form to:
Community Foundation of Wabash County
105 W Second St, Suite 100
North Manchester, IN 46962
2. Requires a $10 initial deposit. Visit https://www.collegechoicedirect.com/ and click Enroll Now. Then it is essential that you contact the Community Foundation to let us know that you have opened an account
What information will be required when I open a Promise CollegeChoice 529 account?
- For the student: legal name, mailing address, phone number, date of birth, Social Security Number, school, grade, and graduation year
- For the parent/guardian: legal name, mailing address, phone number, date of birth, email address (if any), Social Security Number
What am I agreeing to when I sign the 529 enrollment form and the Participation Agreement?
- You certify that you are the parent or legal guardian of the student. You acknowledge that you are not guaranteed a specific rate of return on your investment. You authorize Promise Indiana representatives to take photographs, video or audio recordings of or interviews with your student for use in promotional materials, and to collect non-identifying information about your student for use in research and evaluation.
How will I know that my account has been set up?
- Seven to ten days after you submit your application, your account number will be mailed to you.
How do I complete the Investment Option section?
- We recommend you choose the “Age-Based Option.” This option enrolls your student into the portfolio closest to your student’s age and is adjusted to become more conservative as your student approaches college age. You can change the allocation at any time by calling CollegeChoice Direct at 866-485-9415.
Do I retain control of the money?
- Yes and no. Promise 529 Savings Account – Yes. As account owner you choose the portfolios in which you invest, as well as the distribution of the funds. Promise Scholarship Account – No. All funds in the student's individual Promise Scholarship Fund are managed by the Community Foundation.
Can students have more than one Promise 529 account?
- No. A student may have only one account that is eligible for Promise savings matches. If the student has other accounts, they may not be linked to the Promise program.
How can I find out if my college savings account will work with Promise Scholarships?
- Call the Community Foundation of Wabash County at 260-982-4824. If we do not find an account number for you, call CollegeChoice Direct at 1-866-485-9415 and ask if you have an account. If you learn that you have an account but it is not linked to the Promise, you may link it to the Promise Scholarship program by submitting the “Existing Account” form found at cfwabash.org. If you learn that you do not have a CollegeChoice 529 savings account, you may open one as explained in answer to the question “How do I open a Promise CollegeChoice529 account?”
My child already has a CollegeChoice Direct 529 savings account. Can I use that account to participate in Promise Scholarships?
- Yes. If you opened a CollegeChoice Direct 529 savings account on your own, you will need to link it to the Promise Scholarship program by submitting the “Existing Account” form. The online form is found at cfwabash.org, or you may sign and return a paper copy to the Community Foundation.
I have a CollegeChoice 529 savings account, but I can’t find the account number. How can I find out my account number?
- Call the Community Foundation of Wabash County for the account number.
My child already has a college savings account that is managed by my financial advisor. Can I use that account to participate in Promise Scholarships?
- No. Promise Scholarships can only be awarded to students who have direct (not managed) 529 savings accounts. The solution is to simply open a CollegeChoice direct account at wabashcountypromise.org for the student.
My child already has a college savings account that was set up in another state. Can I use that account to participate in Promise Scholarships?
- No. Each state has its own tax-sheltered college savings account program, but Promise Scholarships can only be awarded to students with the Indiana-based CollegeChoice 529 direct savings account.
Who can open a CollegeChoice529 Direct Savings Plan account?
- Any U.S. citizen or resident alien, 18 or older, or an entity that is organized in the U.S., with a Social Security number and U.S. street address, 18 or older, can open a CollegeChoice 529 account, regardless of income level. Parents, grandparents, other family, and friends can open an account for anyone they choose.
Who can contribute to a 529?
- Any number of people can contribute to the same CollegeChoice 529 account, but total contributions cannot exceed $298,770 for all accounts for the same beneficiary in 529 plans sponsored by the State of Indiana.
Who can be a beneficiary?
- Any person of any age (with a Social Security number) can be named as the beneficiary of a CollegeChoice 529 account. As account owner, you can select a child, adult or even yourself as beneficiary. If a beneficiary decides not to attend college, you can name another beneficiary who is a qualified member of the same family as the original beneficiary. Please see the Disclosure Booklet for more information on who qualifies.
How can I manage my CollegeChoice 529 savings account?
- Visit collegechoicedirect.com and click Log in to your account, then Sign up for online access. You will be asked for your account number, Social Security Number, and zip code. Then you will choose a username and password. From that point forward, you will log in to CollegeChoice Direct with your username and password.
What if I forget my username for collegechoicedirect.com?
- Enter your email address and the last 4 digits of your Social Security Number, and your username will be sent to the email address on file.
What if I forget my password for collegechoicedirect.com?
- Enter your username and email address. After you answer a security question, you will choose one of two options: 1) A temporary password will be sent to your email address, or 2) You will enter your savings account number, Social Security Number, and zip code. Then you will be asked to reset your password.
Why do I see two account numbers for my child on collegechoicedirect.com?
- The account labeled Individual is the Promise savings account. You deposit your own money into this account. The account labeled Match is the Promise match account. The Match account is created when the student earns matching funds from incentives.
- Promise Scholarships earned will not show in the match account. These funds are held in the student's Community Foundation Promise Scholarship Fund, which is invested by the Community Foundation in an age-based investment portfolio managed by Morgan Stanley.
- Scholarships earned and invested in the student's Community Foundation Fund are owned by the Community Foundation. Parents will receive quarterly reports with the amount in their student's Promise Scholarship Fund.
How do I change personal information at collegechoicedirect.com?
- You may change your address, phone number, email address, delivery preferences, and bank account information by logging in to collegechoicedirect.com and clicking on Manage Accounts, then Profiles and Documents. To change a name, Social Security Number, date of birth, or citizenship, call client services for instructions at 866-485-9415.
Can I attach my child’s Promise scholarship account to a different adult?
Can I transfer funds from my child’s CollegeChoice 529 savings account or scholarship account to another person?
- Yes and no. Savings account – Yes. You may change the beneficiary at collegechoicedirect.com. Scholarship account – No. All funds in a student’s scholarship account must be used for college or career education or be returned to the Community Foundation.
How do I make a withdrawal from my child’s CollegeChoice 529 savings account?
- Log on to your online account and follow prompts. There are tax penalties if used for expenses not related to college.
What are the fees associated with CollegeChoice 529?
- CollegeChoice 529 has no commissions, loads, or sales charges. The total annual asset-based fee varies from 0.26% to 0.90%, depending on the Portfolio you choose.
How do I make a deposit online?
- Log in to collegechoicedirect.com and click Contribute. You will need your bank name, routing number, and checking or savings account number.
How do I make a deposit by mail?
- Write a check to CollegeChoice 529 Direct Savings Plan and write the student’s Promise 529 savings account number on the memo line. Include the student’s first and last name with the check and mail to:
CollegeChoice 529 Direct Savings Plan
95 Wells Avenue Suite 155
Newton, MA 02459-3204
How do I deposit cash into my 529 account?
- Bring cash to the Community Foundation or to Mutual Bank on Cass St. in Wabash. Include your child’s first name, last name, school, and CollegeChoice 529 savings account number.
How can a friend or family member deposit money into my child’s account?
- Give your friends and family your child’s Ugift code instead of the more secure account number. To find out this code, log in to collegechoicedirect.com and click Ugift. Share this code with others and invite them to deposit money into your child’s 529 savings account through Ugift.com. Those who donate must provide their name, contribution amount, and bank information.
What is the maximum amount that can be contributed to my 529 savings account?
- The limit on total contributions (from you and anyone else) is $298,770. After that, the account may continue to grow higher through investment earnings only.
What is the impact of a CollegeChoice 529 account on Indiana state financial aid?
- If you and your beneficiary are Indiana residents, there is no impact on state financial aid. For more information on Indiana state financial aid, click here.
What impact does a 529 plan have on eligibility for federal financial aid?
- Personal contributions to your CollegeChoice 529 savings account are considered assets and counted at different rates for the Expected Family Contribution (EFC) in the FAFSA formula. As of July 1, 2009, federal guidelines are as follows:
- If the student is a dependent, a 529 plan account is considered as the parent's asset (if the account owner is the parent or the dependent student). As a result, it will generally be counted at a rate of only 3-6% of its value for the EFC.
- If the student is not a dependent and is the account owner, the 529 plan account is treated as the student's asset and is generally factored into the EFC at the higher rate of 20%.
- Promise scholarships and savings matches earned in your CollegeChoice 529 scholarship account are not considered assets, and are not counted towards the Expected Family Contribution in the FAFSA formula.
Note: Financial aid programs offered by educational institutions and other non-federal sources may have their own guidelines for the treatment of 529 plan accounts. For complete information about financial aid eligibility, you should consult with a financial aid professional and/or the state or educational institution offering a particular financial aid program, since rules and regulations often change.
How often can Promise Scholarships be earned?
- Students have opportunities during each school quarter to earn Promise Scholarships.
What is the maximum total scholarship a student can earn per year?
- Students can earn as much as $200 each year in the fourth, sixth and eighth grades if they complete all learning activities and earn all savings matches. Students can earn $110 in savings matches in the fifth and seventh grades.
What taxes will I have to pay when I withdraw money from the 529 account?
- All of the contributions made to your account grow tax-deferred and the distributions are free from federal and Indiana State taxes if used for qualified higher education expenses.
What happens to the scholarships if the student does not attend college?
- If the student chooses not to pursue education beyond high school by the time he or she reaches the age of 26, Promise Scholarship funds are forfeited and made available by the Community Foundation of Wabash County to be earned by other students. Any money you deposited remains available to you in the 529 savings account.
Where can scholarships be used?
- At any institution that accepts federal funding. The term “college” refers to any education beyond high school (e.g., an industry recognized certification, a 2- or 4- year degree).
Does my child have to attend college in Indiana?
- No. You can use the assets in your account toward the costs of nearly any public or private, 2-year or 4-year college nationwide, as long as the student is enrolled in a U.S.-accredited college, university, graduate school, or technical school that is eligible to participate in U.S. Department of Education student financial aid programs.
Are there protections for my scholarship account?
- No one can access Promise Scholarship funds except the student in whose name the scholarship account was established. Promise Scholarship funds are only disbursed to qualified institutions for qualified educational purposes. Neither the student nor the student’s family can use the scholarship funds for anything other than qualified college and career training expenses.
What savings matches are available?
- When you open a new Promise 529 savings account for a student during the beginning of year enrollment period, Parkview Health will deposit $25 into your Promise 529 savings account.
- If you deposit at least $20 each semester during the school year, the Community Foundation will match your deposit dollar for dollar in your scholarship account. If you successfully make deposits both semesters, the Community Foundation will deposit an additional $10 into the scholarship account
- If you or the student’s champions (family or other supporters) deposit at least $25 into a student’s Promise 529 account on or before October 31, Parkview will award a 3-to-1 match and deposit $75 into the student’s scholarship account.
When will the savings match dollars show up in my scholarship account?
- January and July
When in the last day I can deposit money to earn the quarterly savings match?
- Deposits must be done online, postmarked, or returned to the Community Foundation on or before the last day of each semester (December 21, 2017 and May 25, 2018).
What is a champion?
- A champion is someone who supports a student (or students) in his or her dreams and future college and career success. A champion can help in two ways: by making a gift to a student’s CollegeChoice 529 account or providing written or verbal encouragement and support.
What is my tax savings for depositing money into an individual’s CollegeChoice 529 savings account?
- For Indiana taxpayers, 20% of the contribution amount is applied as state tax credit. The maximum amount that can be claimed is $5,000, for a maximum annual tax credit of $1,000
What tax benefits can I get from CollegeChoice 529?
- Earnings grow tax deferred and are free from federal income tax when used for qualified higher education expenses.
What is the tax penalty if I withdraw money from my Promise 529 savings account for something other than career training or college education?
- The earnings portion of a withdrawal not used for a beneficiary’s qualified higher education expenses is subject to federal and state income taxes and may be subject to a 10% federal penalty tax. Additionally, any accumulated earnings that are withdrawn from your account must also be reported on the recipient's income tax return for the year in which they are withdrawn.
- Money cannot be withdrawn from the scholarship match account by anyone other than the Community Foundation and for the explicit purpose of educational expenses.
How can donors support this work?
- Individuals, clubs, churches, employers, or any group may support the Promise Scholarship program by making contributions directly to the Community Foundation of Wabash County. Donors may choose to sponsor scholarships for a classroom, an entire grade level or school system, or for certain activities, such as college preparation activities or academic growth scholarships. Contributions to the program may be made in honor of or in memory of someone.
What is the tax benefit for contributions to the overall Promise Scholarship Program?
- Charitable gifts from individuals to the Community Foundation for the scholarship program are tax deductible.
Joanne Case, Promise Scholarship Director Grades 4-6
Nancy Alspaugh, Promise Scholarship Director Grades 7&8