Glossary

Glossary definitions provided in part by the Jump$tart Coalition for Personal Financial Literacy.

1099: An IRS information form used to report a variety of income payments when the taxpayer has received income from sources other than a wage-paying job. An example would be a 1099 form provided to an independent contractor by a business to which they contracted as a record of the income they received from that business.

401(k): An employer sponsored retirement investment account. An employer company contracts with a brokerage company to manage the retirement plan for its employees. Employees elect to have a portion of their payroll deducted before taxes are taken out, and this amount is deposited with the brokerage. Some employers offer to match contributions that their employees make in the 401(k) plan.

403(b): An employer sponsored retirement investment account. An employer company contracts with a brokerage company to manage the retirement plan for its employees. Employees elect to have a portion of their payroll deducted before taxes are taken out, and this amount is deposited with the brokerage. Some employers offer to match contributions that their employees make in the 403(b) plan. 403(b) plans are only available to employees of non-profit organizations.

529 Beneficiary: The person identify on the Account Application as the beneficiary of the Account whose Qualified Higher Education Expenses will be paid from the Account.

529 College Savings Plan: These state-sponsored college savings plans were established by the federal government in Section 529 of the Internal Revenue Code to encourage families to save more for college. They have important benefits you can't get from other savings plans, making them one of the best ways to save for college

529 Eligible Educational Institutions: Eligible Educational Institutions include accredited postsecondary educational institutions in the United States or abroad offering credit toward an associate's degree, a bachelor's degree, a graduate-level or professional degree, or another recognized postsecondary credential, and certain postsecondary vocational and proprietary institutions. To be an Eligible Educational Institution for purposes of Section 529, an institution must be eligible to participate in certain U.S. Department of Education student financial aid programs.

Academic Competitiveness Grant: A Federal Grant that is awarded based on a rigorous high school curriculum. To be eligible for this grant a student must meet the guidelines for Pell Grant eligibility, be enrolled full time and be a US citizen. $750 is awarded the first year and $1,300 is awarded the second year.

Academic Year: period of time used to measure a quantity of study. Many schools' academic years are nine months and include two semesters: fall and spring term. However, academic years vary by school.

Account: When used in reference to a 529 plan, account means your individual College Savings account to which the money you contribute will be allocated. You may open more than one Account for the same Student.

Account Application: When used in reference to a 529 plan, refers to the Direct Portfolio College Savings Plan, Stable Value Plus College Savings Plan or Scholars Choice College Saving Program Account Application.

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