Ohio's 529 Plan, CollegeAdvantage, welcomes the following guest column from Rachel Biar, the Chair of the College Savings Plans Network (CSPN) and the Assistant State Treasurer for the Nebraska 529 College Savings Program. The blog originally posted in the CSPN website on Aug. 29, 2023, and can be read here.
As we welcome another school year, it is hard not to reflect on what school was like at this time last year. While the world appears to be sorting out a new normal, the priorities of families with their finances has seen a definite change. In many ways, uncertainty and chaos makes a clear path for individuals on what they would like to do differently or change. The 529 college savings plan community has experienced that change as well.
According to the College Savings Plans Network (CSPN) as of March 31, 2023, nationally, more than $432 billion dollars were being saved in 529 accounts across more than 16.1 million accounts. In fact, 16 million Americans now have dedicated funds in their name to help achieve goals of higher education.
This September is College Savings Month, and we honor the 16 million Americans saving in 529 programs nationwide. With the uncertainty of the financial world, these individuals know that there is money being set aside for the future. But why are they saving it in 529 accounts? Why not in a bank account or other financial product?
A 529 plan is a tax-advantaged investment plan designed to help families save for a child’s or grandchild’s future higher education expenses. While commonly referred to as 529 plans, they are formally known as “Qualified Tuition Programs,” as defined in Section 529 of the Internal Revenue Code and are administered by state agencies. Savings in a 529 plan grow free from federal income tax, and withdrawals remain tax-free when used for qualified higher education expenses. Some states also offer state income tax credits or deduction to residents contributing to their state’s 529 higher education savings program. To see what extra benefits your home state’s 529 plan offers, visit www.collegesavings.org/find-my-states-529-plan.
To help your family kick off your own 529 savings journey or to add to an already established 529 account, CSPN is giving away nine (9) $529 college savings awards! Visit www.collegesavings.org/sweepstakes to enter “What Can A 529 Do For You?” College Savings Month Sweepstakes. Complete the online form and add your testimonial on how a 529 can benefit your family’s education dreams. This sweepstakes will start at 12 a.m. Friday, Sept. 1, 2023, and will run through 11:59 p.m. Sunday, Oct. 1, 2023. You can enter this sweepstakes one time only.
In a recent collaboration between the National Association of State Treasurers Foundation and Enrich, a learning module, available to everyone, was created to explain the benefits of a 529 plan and the role they play in helping an individual fund future education expenses. Check it out here: https://nast.enrich.org/courses/understanding-the-basics-of-a-529-plan.
For these reasons, many parents have found 529 savings accounts are the best vehicle for saving for higher education. Back-to-school time is a great reminder every year to review financial plans for future education costs. Every single dollar saved is much better than a dollar borrowed but that takes planning and some personal sacrifice before higher education becomes a reality for most families.
To learn more about 529 plans across the country, visit collegesavings.org and utilize the new “529 Plan Search and Compare” tool.
About the Author:
Rachel Biar is Chair of the College Savings Plans Network and the Assistant State Treasurer for the Nebraska 529 College Savings Program. The Nebraska Educational Savings Trust (NEST) provides four plans: NEST Direct College Savings Plan, the NEST Advisor College Savings Plan, Bloomwell 529 Education Savings Plan, and the State Farm 529 Savings Plan. The Nebraska State Treasurer serves as the Program Trustee. Union Bank & Trust serves as the Program Manager, and all investments are approved by the Nebraska Investment Council. Families nationwide are saving for college using the NEST 529 plans, which have $6.5 billion in assets and more than 297,000 accounts. Visit NEST529.com and treasurer.nebraska.gov for more information.
