WHAT IS THE SOURCE OF THE SCHOLARSHIP MONEY?
There are two primary funding sources for Alabama’s CollegeCounts 529 Scholarship Program.
- Administrative Fees
“CollegeCounts 529 Fund” is the marketing name for what is actually known as the ACES Trust Fund under Alabama law. The ACES Trust Fund is part of the ACES Program, which was established as a college savings alternative that allows contributors to open savings accounts to pay for a beneficiary’s qualified educational expenses at an eligible institution of higher education. These savings accounts can be sold directly to individuals or sold to individuals by financial advisors. The ACES Trust Fund receives a 0.10% administrative fee each year from the assets held in the advisor-sold program.
- AHELC Surplus Funds
The Alabama Higher Education Loan Corporation (AHELC) was established to provide student loans to Alabamians. After a long period of inactivity, AHELC was revived, only to see its business model abolished by the U.S. Congress. As a result, the AHELC Board of Directors chose to cease operations, dissolve the nonprofit corporation, and grant the existing surplus to help fund Alabama’s CollegeCounts Scholarship Program. This decision was made in accordance with AHELC’s founding purpose of funding higher education student aid.