Navigating the Oregon College Savings Plan (Embark): A Comprehensive Guide
The Oregon College Savings Plan, now rebranded as "Embark," is designed to help families save for future education costs. Whether it's for college, vocational school, or even apprenticeship fees, understanding the details of this 529 plan is crucial for Oregon families. This article will provide a detailed overview of the Embark plan, its benefits, and how to make the most of it.
What is the Oregon College Savings Plan (Embark)?
The Oregon College Savings Plan, known as Embark since September 2025, is a 529 plan designed to help families save for their children’s or grandchildren’s future education. Its main purpose is to help families contend with the future high costs of their children’s or grandchildren’s college or vocational education. The plan offers a way to invest in a beneficiary's future qualified higher education expenses through an investment account.
Eligible Educational Institutions
Funds from the Oregon 529 plan can be used at any post-secondary institution accredited throughout the United States and internationally. This includes universities, colleges, community colleges, trade schools, and graduate schools. Accreditation ensures that the institution is eligible for federal financial aid.
Changes and Expansions in 2025
Starting in tax year 2025, Embark funds can be used for a broader range of K-12 expenses beyond tuition, including curriculum materials, tutoring, and test prep. Additionally, 529 funds can now be used for professional certifications, trade school programs, and registered apprenticeships, expanding the scope of qualified expenses.
Opening an Account
Any U.S. citizen or resident alien with a valid Social Security number or tax identification number who is at least 18 years old can open an account. Enrolling in the Oregon College Savings Plan can be done online. When opening an account online, you’ll need your bank account or savings account numbers and bank’s routing number to make a minimum opening contribution of $25.
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Contribution Limits and Carryovers
Oregon residents can claim a state tax deduction for their contributions, with the maximum deduction dependent on income. For 2025, the maximum deduction is $4,870 for joint filers and $2,435 for single filers. The lifetime contribution limit is $400,000. Beneficiaries can roll over up to $35,000 over their lifetime from a 529 plan to a Roth IRA, provided the 529 account has been open for 15 years or more. Annual rollover amounts are limited to the yearly Roth IRA contribution limit, which is $7,000 in 2025.
Tax Benefits of the Oregon 529 Plan
State Tax Benefits
Oregon families can take tax credits worth up to $300 for contributions to the plan each year. Single filers can take up to $150 in tax credits. However, your adjusted gross income must be $30,000 or less in order to get the full credit. The credit phases out for people with more in AGI. Previously, Oregon allowed tax-deductible contributions. And Oregonians can still take advantage of this perk based on the contributions they made before December 31, 2019. Families can deduct up to $4,865 worth of these contributions from their state tax returns. Single filers can deduct up to $2,435.
Federal Tax Benefits
As with any 529 plan, your money grows tax-free. And you can make tax-free withdrawals as long as you use them on qualified educational expenses. The SECURE Act tweaked the meaning of qualified education expenses to include the costs of apprenticeship programs. You can also take out up to $10,000 tax-free to pay student loan debt. That's a lifetime amount, however. You can also withdraw up to $10,000 tax-free each year to pay for tuition at private, public and religious schools. This perk applies to federal taxes. Seek a local accountant to see how this may impact your state tax return.
Tax Implications of Non-Qualified Withdrawals
Non-qualified withdrawals are subject to federal income tax and may be subject to a 10% federal penalty tax. You may also have to pay back previously claimed deductions related to your 529 plan contributions. It's crucial to consult with a tax advisor to understand the implications of non-qualified withdrawals.
Investment Options
Oregon’s direct-sold 529 plan offers several portfolio options designed for various risk profiles and levels of investment knowledge.
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Age-Based Portfolios
These portfolios automatically rebalance their asset-allocation, the mix of stock funds, bond funds and other securities, over time. When your child is young, the portfolio will aim for strong returns by investing heavily in stock funds, which are generally riskier but have the biggest potential for growth. As your child gets closer to the college years, the portfolio will shift focus to safer investments like fixed-income and money market funds. Investors in Embark can select from the following investment options. increments. In each portfolio, investments are moved automatically to progressively more conservative investments as the beneficiary approaches the targeted year of college enrollment. increments. In each portfolio, investments are moved automatically to progressively more conservative investments as the beneficiary approaches the targeted year of college enrollment. TIAA, T. Rowe Price, and VanguardUnderlying fund allocations:.
Multi-Fund Portfolios
The asset-allocations for these portfolios are based on different risk profiles and objectives so you can customize your plan. The mix is designed to stay constant over time.
Single-Fund Portfolios
These portfolios divert your money entirely to one underlying mutual fund and performance will rely solely on that fund.
Guaranteed Option
This is essentially an interest-bearing savings account held by the Bank of New York. It protects your earnings while still generating a steady return on your investments. This option is FDIC-insured.
Costs and Fees
With the exception of the guaranteed portfolio option which carries no fees, Oregon’s 529 college savings plan charges a total annual asset-based fee which varies depending on which portfolio you invest in. That fee factors in underlying fund expenses as well as a plan administration fee. It’s not charged out of your pocket but rather factored out of your account balance each year. The total annual asset-based fees for portfolios in the plan currently range from 0.25% to 0.72%.
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MFS 529 Savings Plan (Advisor-Sold)
With the guidance of a financial advisor, you can invest in the advisor-sold MFS 529 college savings plan, which is also sponsored by the state of Oregon. It has an opening balance of $250 and, like the direct-sold plan, allows for a maximum contribution of $305,000. Though it has higher fees than the direct-sold plan, this advisor-sold option will appeal to an investor who wants the guidance of a trusted professional.
Fees and Expenses for MFS 529 Plan
The MFS 529 Plan sponsored by Oregon state is an advisor-sold plan. These work a bit differently from their direct-sold counterpart. For starters, these are offered through financial advisors who guide you through the process. Of course, this comes at a price. You’ll see fees that aren’t typical to direct-sold options such as sales charges and a variety of administrative fees factored out of your account balance. The MFS plan’s fee structure can be broken down into fee structure and ongoing expenses. Each portfolio charges a total annual asset-based fee (ongoing expenses) depending on share class. Overall, this fee ranges from 0.67% to 2.09%. In addition, you may face a type of sales charge depending on the share class you invest in. If you invest in share class A units, for example, you can face a maximum sales charge of 5.75%. This is taken from your contributions. If you invest in share class C, you won’t get a sales charge. But you might face a contingent deferred sales charge (CDSC). These are usually levied if the shares are redeemed within a certain period of time after purchase. The maximum CDSC is 4%, triggered when you redeem within a year. The plan also charges a $25 account maintenance fee.
Investment Options for MFS 529 Plan
With the guidance of a financial advisor, you can build an investment strategy based on your unique risk profile and savings goals. and international stock funds. You can also choose from portfolios that each invest in a single asset class. In addition, you can invest in age-based portfolios that automatically change their asset mix to become more conservative as your child gets closer to the college years.
How to Withdraw Money
The payment can be sent to you, your beneficiary or the educational institution you’re funding. However, only the account holder can request a withdrawal. Also, make sure you keep all receipts to distinguish qualified expenses for tax purposes. To withdraw money from the MFS 529 College Savings Plan, you can reach out to your financial advisor or visit your online account to request a withdrawal. Before you make one, however, you should consult your advisor in order to do it properly without unwittingly triggering a nonqualified withdrawal and resulting tax penalty.
Program Features and Incentives
E-gifting Platform
Yes. Account owners can set up a customized gifting page which creates a URL link that can be shared with family and friends. This URL link can then be used to make digital contributions to an account.
Program Match on Contributions
The Oregon Baby Grad Program will provide a one-time contribution of $100 to families that open an Emabark account by their child's first birthday. The child must be an Oregon resident. Under the Kinder Grad incentive program, when an Embark account is opened for an Oregon kindergartener who doesn't already have an account, $100 will automatically be deposited to the account within three months. The Oregon Scholars program allows the Embark to partner with state colleges and universities to offer incentives to Oregonians saving for education. Partnering universities reward savings by offering additional cost savings when attending their schools.
Rewards Program
Yes, the Upromise Rewards program can be linked to any 529 college savings plan.
Alternatives to the Oregon 529 Plan
You do not have to live in Oregon to invest in its 529 plan. Take a look at these other states' 529 plans. citizens and resident aliens at least 18 years old, emancipated minors, UGMA/UTMA custodians, and legal entities. You are not limited to your own state's 529 plan, so compare the plan and tax benefits offered by your state to other options. Here are some plans that are available to residents of any state and have earned awards in our 529 Plan Ratings:.
Run the Numbers: Savings Example
To illustrate the potential benefits of a 529 plan, consider the following example:
- Tax-free investment with Embark: \$9,162
- Traditional savings account: \$5,727
All investments involve some risk and do not guarantee a certain growth. The results generated by the calculator are estimates only and may not reflect actual outcomes. Estimates should not be relied upon as investment or financial advice and we assume no responsibility or liability for decisions made based on these estimates.
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