Parents saving for a child’s college education are the primary users of Education Savings Accounts (ESAs), although any person under 18 or with special needs can be the designated beneficiary. The ESA is a trust account restricted to paying qualified higher education expenses.

Quick Facts

  • Anyone may establish ESAs for any qualified beneficiaries. Beneficiaries must be under the age of 18 or have special needs
  • Contributions are not tax deductible; however, account funds grow tax-free
  • Distributions less than the amount of qualified education expenses in that year are tax-free.
  • Account balances must be distributed to the beneficiary before s/he reaches age 30 except for beneficiaries with special needs
  • The designated beneficiary can be changed. Unused funds can be rolled over tax-free to an ESA created for another family member under age 30

ESA Details

Consider This

While commonly associated with college savings plans, an ESA can provide benefits for elementary and secondary school education expenses as well. Funds in the ESA can be used to make contributions to a qualified tuition plan (QTP) on behalf of the same beneficiary. However, contributions can be made to a QTP in any year without reducing the amount that can be contributed to an ESA for the same beneficiary. Only one rollover per ESA is allowed during any 12-month period. Regulations defining a “special needs beneficiary” for the purposes of an ESA have not been released by the IRS; however, one can safely assume that any individual who is age 18 or older and eligible for Supplemental Security Income (SSI) due to blindness or disability is a “special needs beneficiary.”


Open a CamaPlan ESA

Education Savings Accounts can be set up at any trust company, bank, or financial institution qualified to administer IRA accounts. The account must be initially funded with a cash contribution of no more than $2,000 before the beneficiary reaches age 18.

Investment Opportunities

The IRS prohibits self-dealing or transactions with certain disqualified persons (family, beneficiaries, or a fiduciary) in the investment of IRA funds. Otherwise, there are few restrictions on investment, and CamaPlan accountholders have access to an unlimited number of alternative investment options, including real estate, gold and silver, business ventures, and loans.


Learn more

CamaPlan Services and Fees

As trustee and administrator for qualified tax-deferred savings accounts, CamaPlan has fiduciary responsibilities to both our clients and government taxing authorities, which we execute promptly, professionally, and cost effectively. Rather than bury the cost of those services in the cost of investment products we sell, accountholders pay an annual charge based on the type of account.