Vermont selects Vestwell to administer 529 savings program

Vestwell has just strengthened its presence in New England as it secures an agreement to oversee one of Vermont's crucial state savings programs.

The fintech firm announced it has been selected to manage Vermont’s 529 education savings program, expanding its role in the state’s public savings initiatives.

The new partnership with the Vermont Student Assistance Corporation, which administers VT529, will support the state's broader effort to streamline savings options for residents.

With the agreement, Vestwell has officially become the provider for all three of Vermont’s state-sponsored savings programs, including VTSaves, an auto-IRA retirement program, and Vermont ABLE, a savings plan for individuals with disabilities.

The company will now oversee education, retirement, and disability savings plans for the state through a single platform.

"We are incredibly proud to be selected to power Vermont's 529 Education Savings program," Douglas Magnolia, president of state savings at Vestwell, said in a statement Thursday. "Our partnership with the state exemplifies Vestwell’s ability to work collectively with multiple state agencies—each with their own unique programs – to create a cohesive savings experience."

Like other 529 plans, VT529 allows families to invest in education-related expenses through tax-advantaged accounts with various investment options. Since the program’s launch in 1999, it's reportedly seen more than 13,000 students and families withdraw over $400 million for qualified educational costs.

"Students and families trust us to help them invest in their future," said Scott Giles, president and CEO of the Vermont Student Assistance Corporation. "We value Vestwell’s proven success, offering account holders low fees and an easy-to-use platform."

Currently, 35 US states offer 529 education savings plans. Citing data from the Investment Company Institute, a January article by the Motley Fool reported Virginia leading the way in 529 plan assets with $105 billion as of 2024. New York was a distant second with $51 billion, followed by Nevada with roughly $44 billion in 529 plan assets. From 2008 to 2024, 529 plan assets reportedly grew in value from $105 billion to $509 billion.

Accordin to the ICI, assets in all 529 plans combined stood at $471.2 billion at the end of 2023, including $446.6 billion saved across 15.6 million savings plan accounts.

Vestwell claims significant leadership in the public plan savings space, reporting that it manages more than 30 state-administered savings programs across the US including auto-IRAs, 529 education savings plans, and ABLE disability plans.

"By powering all three of Vermont’s state savings programs, we can provide individuals with access to a full range of savings tools on one, unified platform," Magnolia said.