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By Eric Bennett, College Countdown Editor, ScholarShare 529 

August 6, 2024

Preparing for college drop-off day can be overwhelming. So, here are a few practical matters to consider before your student leaves home.

What to do before your student leaves for college:

  1. Transfer Money—Make sure you can transfer money to your student through bank accounts or services like Venmo for urgent situations.
  2. Medical or Psychological Care – Arrange ongoing care for any preexisting medical or psychological conditions. Contact the student health center to learn about local resources and available services.
  3. Medical Information – Make sure your student knows their medical history, including details of surgeries, allergies, or illnesses. This information is crucial at times when they may not be able to get in touch with you. 
  4. Medical Records Access – Once your teen turns 18, their medical information is protected by HIPPA. Decide if you need access to their records and sign any necessary documents before they leave. 
  5. Local Medical Facilities—Find a local urgent care or emergency room that accepts your health insurance so you won’t have to pay high out-of-pocket costs. A resource like Zocdoc can help. Have your student save these contact details.
  6. Insurance Cards – Make sure your student has health and dental insurance cards with photos of both sides on their phone.
  7. Social Security Number – Make sure they memorize their social security number – they’ll need it. 
  8. First Aid – Create a small first-aid kit with necessary medications and treatments.
  9. Ridesharing—Give them a ridesharing gift card for emergency rides. Our teens might swear they won’t drink and drive, but nevertheless, give them some ride-sharing funds to keep them safe. 
  10. Roommate Contact Info – Share your student’s roommate’s contact information. You may need it in an emergency.
  11. Prescriptions – Plan how they will get their prescriptions filled locally, whether new or preexisting. Check for a local 24-hour pharmacy.
  12. Grade Information—The Family Educational Rights and Privacy Act (FERPA) means parents don’t automatically have access to grades. For some families, this works. For others, access to grades is. Sign the appropriate documents to enable you to see their grades.
  13. Budgeting – Talk about budgeting. For Freshmen, this might include a small budget for extras. For upper-level students, breaking down living expenses helps them realistically plan for rent, insurance, food, and entertainment.

It’s never too early to prepare your student for college – their journey to independence.

About the author: 

Eric Bennett is the editor for College Countdown, a website maintained by ScholarShare 529 for families with college-bound kids. Eric has over three decades of experience in higher education managing recruitment and marketing, financial aid, and student development at three universities from Georgia to California to New York City.  

By Rodger O’Connor, Associate Director, Marketing & Communications, Washington State’s College Savings Plans (WA529)

July 30, 2024

Summer is a time for fun and relaxation—especially for kids. But just because they take a break from school doesn’t mean the learning should stop altogether. The trick is making it fun for them, so they don’t realize they’re learning something!  

Summertime provides plenty of great opportunities to teach kids essential life skills, like saving money. Whether earning from chores or receiving allowances, here are some creative and enjoyable ways to instill good saving habits in children during the summer months. 

1. Treasure Hunt Savings Challenge: Turn saving into a thrilling adventure by organizing a treasure hunt around the house or the neighborhood. Create clues that lead to hidden jars of coins or bills. Each jar could represent a different savings goal, like a gift they’ve had their eye on or a contribution toward their future education. This activity encourages saving and adds an element of excitement and mystery. 

2. DIY Piggy Banks: Gather some old jars, shoeboxes, or containers and let the kids unleash their creativity by decorating them as personalized piggy banks. They can use paints, stickers, and markers to make them unique. Label each bank with a specific savings goal, such as “Ice Cream Fund” or “Save for Something Big.” This hands-on approach makes saving tangible and fun. 

3. Savings Bingo: Create a bingo card with different saving goals or actions, such as “Save a Dollar,” “Skip a Treat Day,” or “Earn Money Doing Chores.” Each time a child completes one of these actions, they can mark it on their bingo card. Offer small rewards or prizes for completing a line or the entire card. This game makes saving interactive and encourages kids to set and achieve financial goals. 

4. Lemonade Stand Economics: A classic summer activity, running a lemonade stand teaches kids valuable lessons about money and entrepreneurship. Help them plan and budget for ingredients, set prices, and track sales. Encourage them to save a portion of their earnings for future goals, such as education, or donate to a cause they care about. It’s a fun way to learn about profit, expenses, and the importance of saving for the future. 

5. Saving with Science: Combine learning with saving by conducting simple science experiments that illustrate saving concepts. For example, use jars and different-colored rocks or liquids to demonstrate how money saved over time can accumulate. Discuss concepts like interest and growth over time in terms that kids can understand. Hands-on experiments make abstract ideas concrete and memorable. 

6. Storytime Savings: Find books or stories that involve characters saving money or making financial decisions. After reading together, discuss the story and its lessons about saving. Ask kids how they would handle similar situations and encourage them to consider their saving goals. Stories can be powerful tools for teaching kids about saving in a relatable way. 

7. Goal-Setting Vision Board: Help kids create a vision board for their summer savings goals. Provide magazines, newspapers, and art supplies so they can cut out pictures and words that represent their goals, such as toys, trips, or future colleges. Display the vision board prominently so they can visualize their goals and stay motivated to save. This visual approach makes saving feel tangible and exciting. 

8. Family Savings Challenge: Turn saving into a friendly competition by setting up a family savings challenge. Each family member can set a savings goal for the summer, whether it’s a small purchase or a family outing. Track progress on a chart or whiteboard where everyone can see. Celebrate milestones together and encourage each other to stay committed to their goals. This fosters a supportive environment and reinforces the value of saving as a family. 

9. Financial Literacy Games: Explore online
or board games designed to teach kids about money management and saving. Games like “Monopoly,” “The Game of Life,” or digital apps can simulate real-life financial scenarios in a fun and engaging way. Play together as a family or encourage kids to play with friends to reinforce financial concepts and strategic thinking. 

10. Savings Celebration: At the end of the summer, celebrate the kids’ savings achievements with a special event or outing. It could be a picnic in the park, a trip to their favorite ice cream shop, or a movie night at home. Recognize their efforts and the importance of their savings goals. This reinforces their saving habits and encourages them to continue managing their money responsibly. 

Teaching kids about saving during the summer doesn’t have to be dull or daunting. By incorporating these fun and creative activities into their summer routines, you can empower children with valuable financial skills that will benefit them for a lifetime. 

While you’re concentrating on instilling strong habits in the kids, don’t forget about your own saving goals. Research the value of opening a 529 account for their education. Continue to contribute if you already have one. Put a little extra in your savings account each month so you’re prepared for unexpected emergencies. Saving and money management is a lifelong endeavor! 

About the author:

Rodger O’Connor is Associate Director for Marketing & Communications for Washington State’s College Savings Plans (WA529), which includes the GET Prepaid Tuition Program and the DreamAhead College Investment Plan. Since 1998, tens of thousands of students have used more than $1.5 billion of their WA529 savings to attend colleges in all 50 states and at least 15 countries worldwide.

By Curtis Loftis State Treasurer of South Carolina

July 23, 2024

Whether it’s a quiet lane, a winding trail, or a busy highway – the roads we travel are as unique and distinct as the people who travel them. The paths we follow in life are much the same. Some are straight and predictable. Others are full of surprises, twisting and turning to reveal new and unexpected experiences.

When it comes time for young people to select the path that will lead to their future success, they want the freedom and flexibility to make the right choice for them. Families who choose to save for their children’s future with a 529 savings plan gain the opportunity to grow their funds tax-free and the flexibility to use those funds to put their children on the right path—one that will help them realize their dreams, whatever they may be.

The Traditional Route

When I speak with families in my home state of South Carolina, most understand that 529 plans are tax-advantaged savings plans that can help pay for four-year colleges and universities, as well as any qualified education expenses associated with attending these institutions. 

It’s undoubtedly true that 529 funds can be used at eligible four-year public and private colleges throughout the United States, as well as many international schools. They can also be used at two-year schools or for graduate school tuition should your child want to further their education with an advanced degree.

However, as State Treasurer and administrator of South Carolina’s Future Scholar 529 plan, I want families everywhere to know that 529 plans are designed to give them the flexibility to save for various educational opportunities.

The Creative or Directed Route

Perhaps your child has chosen a path that doesn’t include a four-year degree. Does your child dream of becoming an artist? A dental hygienist? A welder? An electrician? 529 plans can also pay for technical school or an apprenticeship registered with the U.S. Labor Department. Is your child inspired to become a hair stylist or a chef? You can use 529 account funds to pay for cosmetology or culinary school and the qualified education expenses associated with attending. 

In addition to tuition, fees, and textbooks, qualified education expenses include supplies, equipment, tools, computers, internet access, housing, and food.  

K-12 Tuition

Do your dreams for your young child include a private K-12 school that charges tuition? You can withdraw up to a total of $10,000 a year, per beneficiary, to pay k-12 tuition at a public or private elementary school or secondary school. You won’t need to pay federal or state taxes in most states when you withdraw funds to pay for K-12 tuition, just as you don’t pay taxes when you withdraw funds to pay for higher education.

Student Loans

In 2019, Congress passed the SECURE (Setting Every Community Up for Retirement Enhancement) Act, expanding the benefits of 529 plans. The SECURE Act allows people who save with a 529 plan to withdraw up to $10,000, per borrower, to repay student loan debt. $10,000 is the lifetime cap on the amount of 529 funds that an individual can use to repay student loans.

And 529 plan flexibility doesn’t end there. If your child doesn’t need to use all of the funds in a 529 account, you can change the beneficiary to an eligible family member, such as a sibling, parent, or even a future grandchild. For example, if you have a child who didn’t use all of the funds in a 529 plan, those funds can be transferred to a sibling to pay their qualified education expenses or pay down their student loan debt.

The Right Path

With a 529 plan, your savings can grow tax-free. Most importantly, the funds you save will give your child greater flexibility to choose the right educational path that aligns with their unique goals, gifts, and abilities. Open a 529 account today and begin saving for your child’s educational journey.

About the author:

Curtis Loftis is the State Treasurer of South Carolina. He also serves as the administrator of South Carolina’s Future Scholar 529 College Savings Plan. Visit treasurer.sc.gov or futurescholar.com for more information on ways to save through a 529 plan.

By Lael M. Oldmixon, M. Ed., Executive Director, Education Trust of Alaska

July 16, 2024

As someone who appreciates the advantages of saving for education with a 529 plan and is a 529 account owner for my two beneficiaries, I applaud families who have diligently planned and contributed to a loved one’s account. When it comes to the pivotal moment of paying the first qualified expenses, account owners can spend less time stressing about how to pay for college by following these easy steps and more time celebrating the success of their savings journey:

Step 1: Calculate Your Qualified Education Expenses

529 plan account owners can withdraw any amount from their 529 plan, but only qualified distributions will be tax-free. The maximum amount you can withdraw tax-free is the total amount of qualified expenses paid during the year minus any amount used to generate other federal tax benefits. 

The remaining amount is your maximum withdrawal amount. You should consult a tax professional or financial advisor to learn more about how tax-free educational assistance and tax credits may impact your 529 withdrawal. 

Step 2: Time the Withdrawal

Withdraw your funds in the same calendar year you plan to use them so that the year’s withdrawals align with the year’s education expenses. Be sure to keep all your receipts. Toward the end of the calendar year, review your expenditures to make sure you have withdrawn funds to cover all qualified expenses. Be sure to give your 529 plan administrator enough time to process your withdrawal request in the same calendar year (approximately 10 business days).

Step 3: Select the Recipient

Account owners are responsible for requesting the withdrawal and may choose to have the funds sent directly to the school, to the beneficiary, or to themself via check or ACH.

If you are sending the funds to the school, be prepared to provide your plan administrator with the beneficiary’s name, student ID, and the school’s name and address.  

Step 4: Request the Withdrawal and Plan Ahead

Most plans allow you to request a withdrawal on the phone, online, or via paper form. Visit the plan’s website and review the options available to you.  

Whichever method you choose, once you have finalized the withdrawal request, follow up with the school to ensure the funds hit the account, keep an eye on your bank for the funds to arrive, or watch for the check in the mail.

End-to-end, it’s recommended that you give yourself a buffer of about 10 business days. If the payment is due on August 15, consider making the request for withdrawal by about August 1. 

Last fall, I wrote an article
about navigating the first year of college, which is a guide for both students and parents. While the tips may be most beneficial for your student, they may also be helpful for you! 

Navigating the First Year of College: A Guide for Both Beneficiaries and Their Parents

Here’s a preview of the article: 

Before Arriving

Continue reading and print the complete list here. 

About the author:

Lael M. Oldmixon, M. Ed., is the Executive Director of the Education Trust of Alaska, which offers Alaska’s three 529 plans: Alaska 529, the  T. Rowe Price College Savings Plan, and the John Hancock Freedom 529. She lives in Alaska with her spouse, two children, and two dogs. 

By Jamie Dushin, Accounting Manager, Achieve Montana, Montana’s official 529 Education Savings Plan.

July 9, 2024

At the end of last year, student loan debt in the U.S. totaled $1.74 trillion.1 That makes for an average monthly student loan payment of more than $393.2 And while loan forgiveness initiatives are up in the air every few months, here’s one thing that’s for sure – saving early can outweigh both the costs and stress of paying for college and higher education. As parents, we’ve learned to do just about anything to help our children – perpetually share the bathroom with our toddler, stay up until 4 a.m. completing school projects, watch the same cartoon episode for the twentieth time (you know the one). But what if, in 2024, instead of stretching ourselves thin to ensure our children’s future, we started saving for it?

Here are the top 5 reasons why starting a 529 plan beats taking out student and federal loans on any given day!

#1: Saving is less expensive than borrowing.

We’ve crunched the numbers, talked to advisors, factored in inflation, and considered rising tuition costs – no matter how you spin it, saving now beats borrowing every single time. And we get it; it doesn’t always make logical sense or even financial sense to set aside hundreds of dollars each month. But what if we told you that setting aside even small amounts (think $15, $25, $50) each paycheck could save you thousands of dollars in the future? Yes, thousands – tens of thousands.

#2: 529 plans can cut tuition costs.

Speaking of costs, college tuition continues to rise every year. Along with it are associated expenses like textbooks, study materials, and room and board. While 529 plans can’t directly cut the tuition price, they offer flexible spending options – allowing students to pursue their general education credits at a less expensive college and then use the rest of their funds toward their primary degree. Funds in most 529 accounts can be used at nearly any two-year or four-year university, trade or technical school, or qualified apprenticeship program. See your state’s plan for additional details.

#3: Zero interest & tax-deferred growth.

And here’s one of the best parts – no interest payments AND tax-deferred growth! What does that even mean? We’ll break it down for you. Unlike a loan, no borrowing is involved, eliminating any compound interest you would owe. But what does add up is the additional savings you acquire! With flexible investment options, every dollar saved in a 529 account has the potential to become another dollar earned. In other words, you save, and then you save again!

#4: 529 plans can be used alongside financial aid.

When it comes to saving for higher education, many parents worry that opening a 529 plan will hurt their child’s eligibility for receiving federal aid. And while the fear is valid, it’s just not accurate. Will a parent’s 529 savings be taken into consideration when reviewing FAFSA applications? Yes. Will they have a significant effect on your child’s financial aid package? No. If your student is a dependent, the funds in your 529 account are considered the parent’s asset. As a result, when determining one’s “Student Aid Index,” funds in a parent’s 529 account will generally be counted at a rate only up to 5.64% of its value – making a minimal difference in financial aid eligibility.

#5: Proactive savings ignites confidence.

We saved the best for last. As parents, we know that our children can dream anything, be anything, do anything! But, as kids, that can often be hard to understand. So, hold onto this – Not only are children who know they have college savings accounts more likely to attend college, but behind every gift, every contribution, and every investment choice is your affirming and resounding voice saying, “I believe in you.” And that voice, your voice, can be the strongest investment of all.

About the author:

Jamie Dushin is an Accounting Manager at Achieve Montana, Montana’s official 529 Education Savings Plan. To learn more, visit achievemontana.com.

References

1https://www.federalreserve.gov/releases/g19/HIST/cc_hist_memo_levels.html

2Board of Governors of the Federal Reserve System Report on the Economic Well-Being of U.S. Households in 2016- May 2017

By Brittany Leona Parks, writer, my529

Are there any products available today that can truly improve financial, career, and mental well-being? Consider what a 529 college savings plan can do. Setting money aside to reduce or eliminate the need for student loans can benefit lives significantly.

Boost early income. Embarking on the adventure of your first job can be stressful enough without having to worry about a significant portion of that paycheck being unavailable. Students commonly believe they can worry about their student loans later. Unfortunately, the payments often come due simultaneous to other expenses in a young person’s life, like buying a car, relocating, or setting up a new home. This is also when early investments have the greatest potential for growth over time. These factors can have a crucial influence on future wealth and quality of life.

Set a strong foundation for life. The financial burden of student loans can delay other milestones like starting a family or buying a home. Gen X first experienced the burden of student loans, then Millennials, and now it shapes how Gen Z views the value of certain degrees or schools. For second-generation college graduates, parents’ outstanding student loan debt could have affected how much money their parents could set aside for them to attend school.

Find freedom and flexibility to optimize opportunities. Recent graduates likely saw their parents struggle economically during the Great Recession and, as such, understand that jobs are not distributed with diplomas. Allowing for some extra time to find the best position — rather than settling for just any job that will pay the bills — can boost lifetime earnings and accelerate career advancement. It can also give you the freedom to pursue a more fulfilling job, but perhaps it pays less.

Reduce the potential to feel financially overwhelmed. Student loans — just like any financial debt — can increase stress and lead to life-long and far-reaching negative consequences. Failing to keep up with student loan payments could ruin credit scores and result in garnished wages and Social Security benefits. Life can be challenging enough, and it’s unlikely that a recent graduate wouldn’t have, at the very least, some financial concerns. This can make facing decades of future bills feel particularly intimidating, especially if students understand how compound interest can change the equation.

Benefit from earnings — not accruing interest on a loan. If students can set aside money now, those compounding gains can work to their advantage. Demonstrating how saving pays off is a beautiful lesson that can also benefit future generations. It is important to remember that, on average, students who graduate with postsecondary degrees see higher earnings, more career opportunities, and better health outcomes — making the cost of higher education even more worthwhile.

Help your student be part of the over 30% who graduate from higher education without student loans and reduce the financial, career, and mental health burdens through investing early and often into a 529 college savings plan.

About the author:

Brittany Leona Parks is a writer for my529, Utah’s educational savings plan. When not researching financial best practices for children, she is trying these strategies out on her own two kids, hiking with her family, and participating in entirely too many book clubs. She previously spent 8 years marketing to the financial and legal sectors.

By Jonathan Hughes, Associate Director of College Planning and Content Creation, Massachusetts Educational Financing Authority

June 25, 2024

If there is one pernicious myth that I could stomp out of existence, it would be this one: “I can’t save any money for college because the financial aid office will see it, and then I won’t receive any financial aid.” Though this is a common belief among families with college-bound students, it’s not true. Let me explain.

Financial aid is awarded on two bases: merit and financial need. When you hear about academic, artistic, or athletic scholarships, these are examples of merit-based aid granted to recognize student achievement. In most cases, family finances are not considered when awarding merit-based aid.

Most financial aid is need-based. When applying for financial aid, families are asked to submit financial aid applications, including the FAFSA®. Based on the information reported, including income, assets, taxes paid, and family size, students receive a Student Aid Index (SAI). This formula-calculated figure is intended to represent a family’s financial strength and ability to pay for college. A low SAI means more eligibility for financial aid. Most people assume that saving for college will result in a high SAI and, therefore, less financial aid eligibility.

What most people need to know is that most of the weight in the SAI calculation is given to income, not assets. In fact, the SAI formula used by every college and university only takes into account, at most, 5.6% of parent total assets, which include college savings accounts. This means if a family saved, for example, $50,000 for college, the SAI formula would only include $2,800 of that in the student’s SAI. So, the impact of saving for college on financial aid is minimal, to say the least. And remember, if a family has saved $50,000 for college costs, that means they’ll have $50,000 to use for the college bill that they won’t need to borrow and pay back later with interest.

College savings accounts started by grandparents have even less effect on financial aid because they’re usually not counted at all. In the past, grandparent contributions from a college savings account toward a college bill counted as student income on the FAFSA, which had a detrimental effect on that student’s financial aid eligibility in later years. That treatment has been changed. Now, college savings accounts owned by grandparents (as well as aunts and uncles) and distributions from those accounts are not asked for anywhere on the FAFSA. The CSS Profile, a financial aid application used by roughly 200 colleges across the country, does ask for information about relatives who plan to provide funds to help pay for college expenses, but it’s up to each college whether or not that information is even considered when awarding financial aid.

Over the years, I’ve spoken with many families who are very concerned about the impact that saving for college will have on their child’s financial aid. But their minds are put at ease once I explain how the SAI formula works. In all my years working to guide parents through college planning, I’ve never spoken to one parent who has regretted saving. In fact, the most common sentiment I hear is, “I wish I had done more.” 

Our message to families should be one of encouragement and education, letting them know that if they haven’t started saving for college, they should begin today. 

About the author:

Jonathan has worked at Massachusetts Educational Financing Authority (MEFA) for 20 years, helping families in Massachusetts prepare for college. As Associate Director of College Planning and Content Creation, he provides guidance on planning, saving, and paying for college to students and their families and serves as host of the MEFA Podcast.

School is out for the summer, grills are fired up for barbecue season, and summer vacations are in full swing. As you shop for hot dogs and sunscreen, you will likely notice that school supplies are creeping back into stores.

As a parent, it feels like we never really get a break from thinking about our children’s education. I love a good deal on pencils and notebooks for my high schooler, but I am usually not ready to think about returning to the classroom in the fall until at least August.

If you have a college-age student, however, it is the perfect time to start thinking about preparing for withdrawals from your 529 plan. Whether you have a child heading off to college or are planning to use the funds for other qualified educational expenses, it’s essential to have a plan in place now for making back-to-school withdrawals.

Here are some tips for preparing for fall withdrawals from your 529 plan:

1. Review your needs: Before making any withdrawals, review how much you have saved and how much you will have to withdraw. This will help you avoid taking out more than you need.

2. Know the plan rules: Some states differ regarding what are deemed to be qualified education expenses, so be sure to familiarize yourself with your own state’s definition. It’s important to understand what is allowed before making any withdrawals.

3. Plan: If you know you will need to make withdrawals in the fall, it’s a good idea to plan in advance. How soon you get your money can vary depending on the method you choose for withdrawing funds. A check, for example, might take longer to arrive at a school than if you send your withdrawn funds electronically. Know your school’s deadlines. Planning will help ensure you have access to the funds when needed and can avoid any last-minute stress or delays.

4. Keep track of expenses: As you prepare to make withdrawals from your 529 plan, be sure to keep track of all your qualified educational expenses. This will help you stay organized and ensure that you can prove how you used your funds should you face a tax audit.

5. Consider tax implications: When making withdrawals from your 529 plan, it’s important to know the rules on how 529 funds are taxed. While contributions to a 529 plan are made with after-tax dollars, withdrawals are generally tax-free if they are used for qualified educational expenses. However, if you use the funds for nonqualified expenses, you may be subject to taxes and penalties.

Preparing for fall withdrawals from your 529 plan doesn’t have to be stressful. By reviewing your account balance, knowing the rules, planning, and keeping track of expenses, you can ensure a smooth and successful 529 withdrawal process. And remember, if you have any questions or need assistance, don’t hesitate to reach out to your 529 plan for help.

Now, go enjoy summer!

About the Author

Cherie Zajdzinski is a content creator for Utah’s my529 plan. She recently relocated to Utah after spending two decades living in Anchorage, Alaska, and is thrilled to be a part of the mission of helping families save for higher education.

Where does a penguin keep his money? In a snow bank.

What did the hamburger name it’s baby? Patty.

What’s brown and sticky? A stick.

When I earned the title “Dad” after our first child was born, the realization that I am entitled to these corny puns was not lost on me. After our fourth child was born, I thought, “This means I am allowed four times the dad jokes, right?” According to my wife… wrong.

But one thing we could agree on? Our commitment to saving for our children’s education.

All jokes aside, being raised by teachers, I understood the importance of education for personal and professional growth. But I also know it’s expensive, which is probably why the start of a Google search for “Is college…” usually ends with “…worth it?” It’s also why my wife and I knew the answer to getting ahead of the cost was opening a 529 account for each of our children.

And you can, too. These investment accounts are an easy way to help the children in your life reach their education goals and help you reach your financial goal to get them there. Here’s how:

529 plans…

  1. Help families save for the costs of education, including K-12, college, graduate, and vocational tuition and fees; books and supplies; student loan payments; room and board; computers; and more
  2. Provide federal (and state, depending on the plan) tax-advantages, including tax-deferred earnings and tax-free qualified withdrawals
  3. Can be opened by anyone, including parents, grandparents, other relatives, and friends
  4. Give control to the account owner since they decide where, when, and how the funds are used, no matter the student’s age
  5. Offer flexibility if the student decides to forgo or postpone their higher education, including the ability to transfer funds to an eligible family member with no penalty

Intrigued? Start researching the right plan for you with CSPN’s 529 Search and Comparison Tool. From there on out, it’s all about rolling with the punchlines until it’s time to use your hard-earned savings. Easy as pie!

About the Author

Iowa State Treasurer Roby Smith is the administrator of Iowa’s 529 Education Savings Programs, College Savings Iowa and the IAdvisor 529 Plan, with over $6 billion invested and more than $5.1 billion in qualified withdrawals.

By Paula Smith, Senior Vice President, Product Strategy and Development – Retirement and College Savings, Voya Investment Management

Having access to higher education has been a transformative experience that has profoundly shaped my life. The opportunity to obtain a college degree opened an endless world of possibilities for me. Although my school was only four hours from my urban neighborhood, it felt worlds away.  

Fundamentally, as parents plan and save for their child’s education, they hope that he or she will not only build a fulfilling career but gain valuable knowledge and skills and a deeper understanding of the world around them. Parents also hope their child will acquire lifelong friends along the way. As I reflect on my own life lessons from my higher education experience, these really stand out:  

Independence: While initially being responsible for running most aspects of your life on your own may seem daunting, ultimately, it is empowering and builds confidence. Simple things like getting to class, learning to navigate other people and situations, and managing my time independently were invaluable lessons.   

Budgeting and Saving: Most college students are pressed to stretch the dollar. Through many part-time and summer jobs and careful planning, I was able to manage day-to-day expenses and plan for a significant trip after graduation. I have carried this lesson throughout my life.

Love of Learning: The journey of intellectual growth is never-ending, and there will always be new horizons to explore, new mysteries to unravel, and new ways of understanding the world around us. That lifetime love of learning has been the personal and professional fuel that will continue to propel me. 

Perseverance: The most important life lesson from higher education is maintaining a long-term outlook in the face of challenges. Grit is about doing what it takes to achieve personal goals.  

Gratitude: While this lesson arrived a bit later than the others, I am profoundly grateful for those who helped along the way: those who awarded scholarships and provided aid, my school and professors, and my parents, grandparents, friends, and other relatives. We simply can’t do it alone.

As I started my career after graduating, I began working with retirement plans and their participants, which was a perfect fit for my skill set and what inspired me. Helping people set goals, work to achieve financial independence, and get on a path to retirement was incredibly rewarding for me.    

Shortly after, I learned about 529 plans and was immediately fascinated by the elegance of these programs—how contributions are made and invested and, ultimately, how they are used to help parents pay for their child’s education.   

The primary objective of a 529 plan is to help beneficiaries access higher education. These programs provide many benefits. They are easy to open and fund, offer strong tax benefits and incentives to help people meet their savings goals faster, and offer flexibility if educational plans should change. As college costs have continued to increase, leveraging a 529 plan early and with purpose makes college more attainable.  

These plans have come full circle with the new Roth IRA rollover provision within 529. They now offer both the ability to help fund a college education and (if money is left over) give the beneficiary a head start on retirement savings.  

Today, I find it particularly rewarding to engage with advisors and participants about saving for college. Higher education has many positive ripple effects, opening doors to fulfilling careers and transforming lives. I am honored to play a role in changing the lives of young people—just as my own life was transformed—and helping to ensure the dream of a college degree is within their reach.  

About the author:

Paula Smith is Senior Vice President, Product Strategy and Development – Retirement and College Savings for Voya Investment Management, a wholly owned subsidiary of Voya Financial.  Voya Investment Management serves as 529 Program Manager for the Wisconsin Tomorrow’s Scholar® 529 program and the Iowa IAdvisor program. She has over 20 years’ experience working with retirement plans and 529 programs.