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Maryland college savings nightmare nears resolution

Fox 5 DC | By Tom Fitzgerald - August 21, 2023

BETHESDA, Md. (FOX 5 DC) - For months, FOX 5 has been telling you about the nightmare situation families who were counting on a Maryland college savings plan to pay for their child’s tuition have experienced.

Some account holders didn’t get their earned interest, while others got too much. Now, Maryland's Treasurer Derek Davis tells FOX 5, they’ve reached a milestone in cleaning up the mess.

Davis told FOX 5 that as of Monday, Aug. 21, the automated recordkeeping system for the Maryland 529 prepaid college trust fund is complete. That’s a big relief for families whose college savings has been stuck in limbo.

Starting Monday, Maryland 529 account holders are finally able to access their information and benefits online.

The online system has been down for months.

Maryland 529 account holders haven't been able to access their account balances, check their benefits or accrued earnings. The general assembly shut down the state agency that had run Maryland 529 when the problems were discovered.

Davis took over the troubled program and told FOX 5 the Maryland 529 meltdown has caused real pain and stress to the affected families. Accounts have now been made whole and fixed, but that doesn’t change what happened.

"The reality is they have bills to pay! And the money was their money," Davis said. "Through that unfortunate turn of events, they weren’t able to access that money, so they had to make alternative plans to get it and that just wasn’t right."

The private board that ran Maryland's 529 college savings program was dissolved by the Maryland General Assembly, and the $1 billion fund was handed over to the state treasurer, Davis, to fix, and find out how it broke.

Davis said poor accounting practices, like manual interest tabulation were part of the problem, but today’s reopening of the online website is just phase 2 of a four phase plan to restore Maryland 529.

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