New Jersey does not offer any state tax benefits for opening a NJ 529 plan. But it does offer these two key benefits:

1) Favorable treatment when you apply for financial aid from the state of New Jersey

2) NJBEST Scholarship - $500-$1,500 towards first semester of higher education at an accredited New Jersey school (we explain details here)

This post focuses on #1, financial aid.

The quick explanation: the first $25,000 of money you save in an NJ 529 plan is excluded from financial aid calculations for state of New Jersey financial aid. (Note that FAFSA is for federal financial aid, and unaffected by this $25,000 exclusion.)

The slightly longer explanation: this amount can change and is set by New Jersey's Higher Education Student Assistance Authority, but it can't be less than $25,000. That's what it is right now. It might go up in the future. If you love reading original sources, we've got that for you below!

To be clear, here at AboveBoard we don't love either NJ 529 plan. The NJ Advisor-Sold 529 Plan (aka "The Franklin Templeton 529 Plan") earns our lowest rating of "Not Recommended" and the NJ Direct-Sold 529 Plan (aka NJBEST 529 Plan) earns a rating of "Just OK, Good in Some Situations".

For clear, honest information about college savings, check out our interactive College Savings Guide!

If you want to read the language from the Investor Handbook, here it is:

The Act provides that an amount to be annually determined by HESAA, which shall not be less than $25,000, of all Program Accounts shall be excluded from consideration in evaluating the financial need of a Beneficiary for the purpose of determining the eligibility of a Beneficiary for any scholarship, grant or monetary assistance awarded by the State. The currently applicable amount is $25,000. The Beneficiary may be required to verify the dollar amount in the Program Account(s) to the satisfaction of the entity or agency awarding the State funds. You should consult with your financial aid advisor to determine the impact of an Account on financial aid in another state.

Look at you, reading original sources, nice work! For clear, honest information about college savings, check out our interactive College Savings Guide.