A 529 College Savings Plan is a tax-advantaged savings account designed to help families save for future education expenses like college tuition, fees, books, and some housing costs. These accounts are usually managed by state-sponsored programs or financial institutions (like Fidelity, Vanguard, etc.), and the funds grow tax-free as long as they’re used for qualified education expenses.
How Backpack fits into 529 plans
Backpack is a special purpose bank account that makes it easier for families to use their 529 college savings plans to pay tuition and other qualified education costs.
With Backpack, you can:
Link your 529 plan to your Backpack account i.e. Add your Backpack account as a new bank to your 529 Plan
Send tuition payments directly to participating colleges and universities
Track the status of your payments, all online, with no checks getting lost in the mail or delayed.
Backpack provides each family with a personal checking account that can be linked to a 529 plan just like any bank account. Once the 529 provider verifies the Backpack account, families can initiate a transfer from their 529 directly to Backpack. Once funds arrive in their Backpack account, families can then make and manage tuition payments to the school and other education expenses.
Backpack does not automatically withdraw funds from your 529 plan when a school issues a bill. You remain in control and initiate any payments or transfers.
Backpack does not support prepaid 529 plans
It’s important to know that Backpack is not compatible with prepaid 529 plans. These plans work differently from 529 savings plans—rather than saving cash in an investment account, prepaid plans allow families to lock in future tuition at in-state public colleges at today’s rates. Because they don’t use account and routing numbers or support electronic disbursements, prepaid plans can’t be linked to Backpack’s banking system.
If you have a prepaid plan, you’re typically responsible for submitting tuition bills and any required documentation directly to the plan administrator, who then arranges payment with the school. This process varies by plan, so be sure to follow your provider’s specific instructions.
If you're unsure whether your 529 is a savings or prepaid plan, it's a good idea to check with your provider before attempting to link it to Backpack.