State’s college savings program (iDeal) reports growth, employer incentives and new Roth rollover option

Dawn Hall, executive director of the Idaho College Savings Program (branded iDeal in program materials), updated the House Education Committee on enrollment growth, program features and recent policy changes affecting 529 savings accounts.

Hall described the program as a tax-advantaged education savings vehicle and said Idaho’s plan is governed by a state board. "An easy way to think of it is it's like a Roth IRA retirement savings account, but for education," Hall told the committee, summarizing features and investment options.

Hall said the program is authorized in state statute (Title 33, Chapter 54 was cited during the presentation) and that the federal tax code for qualified tuition programs is Section 529. She described five core advantages: easy online enrollment, flexibility in qualified uses (K–12 tuition, higher education, trade schools, apprenticeships and related expenses), state tax deduction for Idaho contributors (up to $6,000 for joint filers or $3,000 for individuals, as described in the presentation), investment options including an FDIC-insured high-yield savings option, and expanded uses such as limited student loan repayment and a new 2024 rollover pathway to Roth IRAs.

Hall said Vanguard manages investment funds for the program and Sallie Mae administers the high-yield savings option. She noted account growth in 2024, with new account openings up 14% year over year and rising gift contributions from family and friends. The presentation highlighted several partnership efforts: a dollar-for-dollar matching pilot with the College of Western Idaho (up to $500 per semester for qualifying students) and ongoing discussions to create a similar program at the College of Southern Idaho.

On employer engagement, Hall said hundreds of employers already offer payroll direct-deposit contributions and that Idaho offers a voluntary employer tax credit for direct employer contributions (20% tax credit up to $500 per employee per year). Hall said 13 employers used the tax credit in 2024 and contributed just over $203,000 in that year. She also said the Roth rollover option (available starting in 2024) has seen 81 rollovers totaling roughly $497,000 into Roth IRAs since it became available.

Members asked technical questions about out-of-state account holders and K–12 uses. Representative Harris asked whether the program statistic showing 12.49% "out of state" accounts referred to out-of-state account owners saving for Idaho beneficiaries or Idaho residents saving for out-of-state beneficiaries; Hall said the data reflects a mixture of circumstances (for example, out-of-state grandparents saving for Idaho children or Idaho residents saving for students attending school out of state). Representative Church asked whether 529 funds could be used for private K–12 tuition; Hall confirmed that qualified K–12 tuition withdrawals are permitted but noted that other proposed measures under consideration in the Legislature would involve public funds rather than private 529 contributions.

Hall asked legislators to help spread awareness locally and suggested the program can be a partner alongside scholarships and state programs to fill gaps such as room and board, books and supplies that some scholarships do not cover. She stood for questions after the presentation.