Parents noticing discrepancies with statement balance in Maryland 529 college savings plan
BALTIMORE - A year-long quest for answers continued Tuesday in Annapolis for parents who say their long-term investment into a college savings plan evaporated and left them in a precarious financial position.
For decades, parents have used Maryland 529 as a reliable avenue to save in advance for their children's tuition.
But some parents say they started to notice discrepancies with their statement balance in the spring of 2022.
Brian Savoie, from Silver Spring, said that realization came when he attempted to make a payment for his son's tuition.
"And was told - when I basically - when I received the first bill for college, that my account, that about 40 percent of that account value was frozen. And I have been learning that actually now that 40% is now gone away," Sevoie said.
Savoie was not alone.
Anthony Savia, the executive director for Maryland 529, testified in Annapolis Tuesday that a "miscalculation" led thousands of parents to believe they had more money in their accounts than they actually did.
As many as 31,000 accounts could be affected.
Savia indicated to lawmakers that the total figure is still unclear at this point.
The executive director said while they work to send parents accurate statements, tuition and fees have been paid to about 3,900 accounts this school year.
An additional statement shared with members of the media during the hearing said, "The contracts that Account Holders currently hold are sound and Maryland 529 has not frozen the tuition and fee benefits. Approximately 3,900 unique Accounts have receive payments for beneficiaries for the 2022 - 2023 school year - representing approximately $32 million in payments having gone out for Prepaid Trust Accounts."
But when a lawmaker pushed for more answers, Savia made this admission.
"We're gonna have to get back to you on that because I don't know why that has been an issue because we have not stopped paying tuition fees," answered Savia.
WJZ asked Governor Wes Moore about the problem.
[We] "..continue to assess what exactly has happened and making sure that any miscalculations or challenges, that we have a way of rectifying it" said Governor Moore.
Some parents say after years of saving, they've now been forced to take out loans or take from their retirement savings.
They're hoping lawmakers will push Maryland 529 to pay parents the money that was reflecting on their account, regardless of if it was a miscalculation or not.
"We are not asking for anything additional, we just want what we were promised," said Lori Delaney, from St. Mary's County.
The money parents say they no longer have access to ranges from a few thousand to tens of thousands of dollars.
Despite not having all the answers Tuesday, Maryland 529 says they are "confident that the calculation issue has been resolved" and that they are reaching out to account holders who still have questions.
