EPA Students at Morehouse College’s commencement ceremonies.
College graduation season is in full swing, marking an annual rite of passage — and serving as a reminder that higher education isn’t getting any cheaper. One option available to help families put away money for college, and avoid borrowing too much, is a 529 college savings plan.
In general, 529 plans are college savings and investment accounts sponsored by state governments. Money deposited in the accounts grows tax free, as long as the funds are used for educational purposes when withdrawn. You don’t have to be a resident of a particular state to use its plan, although some states offer additional tax benefits to in-state plan participants.
Most 529s are designed as traditional savings-and-investment vehicles, but some states offer prepaid 529 plans, which allow savers to pay tuition at certain schools in advance at current rates.
To raise awareness of the savings plans, the College Savings Plans Network, a nonprofit group that represents the plans, is promoting Wednesday (that is, 5/29), as National 529 College Savings Day. More than 30 states are organizing events to promote their 529 plans, and some are offering incentives for families to create accounts.
Florida, for instance, is waiving the $50 enrollment fee for plans opened from May 20 through June 30.
Washington State is also waiving a $50 enrollment fee, for plans meeting certain conditions; the account must be established by midnight Wednesday.
And Utah is offering matching contributions of $25, for accounts opened on Wednesday with contributions of at least $25.
The College Savings Plans Network itself is offering a chance to win $529 toward a new or existing savings plan. To enter, you must “like” the network on Facebook.
The network has created an interactive map showing what various states are doing. To see what your state’s plan is offering, click on your state.
Do you take part in a 529 savings plan? If not, will your state’s promotional event entice you to start?
Article source: http://bucks.blogs.nytimes.com/2013/05/28/incentives-to-start-a-529-college-savings-plan/?partner=rss&emc=rss
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