NC college fund seeing more unapproved withdrawals

GREENSBORO — Officials from the state’s college savings program say people stretched thin by the economy are taking money out of their accounts for things other than tuition.

The News & Record of Greensboro reported Saturday that $2.1 million has been withdrawn from the College Foundation of North Carolina’s 529 Plan in fiscal year 2009, but has not been spent on college expenses.

That is the highest in the eight years that the NC 529 Plan has existed.

Program services manager for the savings plan, Jim Sutton, tells the newspaper that the foundation has no way of tracking where the money is being spent, but does know when it’s not being used for college.

There is a 10 percent penalty for unapproved withdrawals and regular taxes on the interest earned.

(Copyright 2009 by The Associated Press. All Rights Reserved.)