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By Troy Montigney, Vice President, Ascensus

August 27, 2025

Recently, a financial podcast I enjoy covered the notion of making actual progress in your financial life. Sometimes, what feels like moving forward might actually be you treading water – or worse, falling behind.

The hosts (and this listener) agreed that the time of life when you’re responsible for young children, particularly ones with significant daycare expenses, is universally a time when it’s tough to move forward. If you’ve ever felt or are currently feeling this way, you’re not alone.

Saving for anything, especially education expenses 15-20 years down the road, can feel overwhelming when you’re otherwise rolling off the back of the financial treadmill. With the huge disclaimer that what worked for one person or family might not necessarily work for the next, here’s how we’ve maintained our commitment to saving amidst annual five-figure childcare expenses (I’ve got mild PTSD just writing that):

Start as early as possible

This one is a no-brainer, but for many, it’s easier said than done. We opened 529 plans for our kids as soon as we had their Social Security Numbers in hand. In each case, we didn’t immediately ship our babies off to daycare – thanks to a mix of parental leave and family support, the first months of life didn’t feel like a financial disaster waiting to happen.

Because of this, we budgeted for recurring, automatic contributions to their accounts. Make no mistake, financial stress eventually came; but when it did, our kids’ 529 plans were a sticky part of our financial life. We sacrificed elsewhere to maintain our plan, all because we started early.

Flip “artificial raises” into actual savings

Most daycare centers and preschools, and certainly each one our family has utilized, charge more to take care of younger children. Think of it as a diaper tariff or bottle tax. The idea is infants are harder to care for than toddlers, who are harder to care for than preschoolers, and so on.

The result of this fee structure is a series of what feel like raises along the way. Even when your income doesn’t change, there’s a little more of it unspoken for once your little one moves down the hallway to a new room. Each time one of those moves happens, you can either absorb the money into some other category of spending or put it to work with intention. We chose to repurpose our freed-up daycare money as extra 529 contributions.

Whether you do that, or up your retirement savings rate, or pay down other debt, the point is to not squander the artificial raise. Put it toward whatever moves your financial life forward. 

Enlist your village

Whether your village is family-oriented, full of friends near and far, or centered around your physical neighbors, it takes one to get through the early childhood years. And that village will show up time and time again for the countless birthday parties you host for your kids.

Keep in mind nearly every 529 plan offers simple and intuitive gifting experiences for your village. Before you reply to the next “What does Jack / Emma want for their birthday?!” text with a $25 toy or outfit, send a link or code to their 529 plan’s gifting platform. It should be noted this has the added benefit of helping to declutter your home at a time when every object known to Amazon will find its way inside your walls!

Pay monthly instead of weekly

File this under “super specific advice that may not actually apply,” but for us, it made a tremendous difference! The early education center where we spent most of our daycare dollars defaulted to weekly billing. Every time there was a month with five weekly payments instead of four – often conveniently around the holidays, or a birthday, or a family vacation – we felt every bit of it.

It turned out the center could easily switch us to prorated monthly billing and were happy to do so. If you already pay monthly, congratulations – saving is a little easier for you. If you pay weekly, take a closer look at whether paying monthly might help you get ahead.

As we approach the day when both our kids attend the same elementary school, I find myself happy to have daycare expenses nearly in the rearview mirror. (Sentimental dad interlude to say I would still give anything to relive the past six years!) More importantly, I’m proud of the steps we took to keep up with our 529 savings goals along the way. You don’t have to take the same ones we did, but I promise that if you take some, you’ll feel pride in your progress too.  

About the author

Troy Montigney is the proud father of 529 Day baby Sophie and her younger sister Molly. By day, he is Vice President of State Retirement Programs at Ascensus. Previously he served on its industry-leading 529 team, which helps over 8 million people save for education via 51 plans serviced across 32 states and the District of Columbia.

Please note: A plan of regular investment cannot assure a profit or protect against a loss in a declining market. This testimonial is not necessarily representative of the experience of other investors and is no guarantee of future performance or success.

If you’ve already earned your undergraduate degree and are now planning to head back for graduate school—whether it’s a part-time MBA, a master’s in education, or an advanced certificate, this is for you.

You’ve done college once. You know the costs, the time commitment, and the pressure of balancing school with everything else. Maybe you’re working full-time, managing rent or a mortgage, or paying off student loans. And now, you’re seriously weighing whether another degree is worth it—and how to afford it.

Here’s one tool that can help: a 529 account. It’s not just for kids or parents. It’s a smart, flexible way to save for your own education—and it could help reduce your out-of-pocket costs for grad school.

Why a 529 Account Works for Grad School

A 529 account is a tax-advantaged savings account designed to help cover education

expenses. While many people associate it with saving for a child’s college tuition, it’s also a powerful tool for adults returning to school.

Here’s how it can help:

What to Do Next
If you’re planning to start grad school soon—or even just exploring your options, here are a few steps to take now:

  1. Open a 529 Account in Your Name

    If your parents opened one for you years ago, that’s great—but you can also open your own. With Invest529, it’s quick and easy to set up an account where you’re both the owner and the beneficiary. (link to more info)

    2. Estimate Your Costs

    Use Invest529’s cost calculator to get a realistic picture of your program’s cost.

    Look at tuition, fees, books, and any required equipment or software. Knowing your target can help you set a savings goal for your timeline. (link to calculator)

    3. Start Contributing—Even a Little

    You don’t need to save the full amount upfront. Start with what you can—$50 a month, or even less. Setting up automatic contributions can help you build momentum without having to think about it.

    4. Use It Strategically

    Once enrolled, you can use your 529 account to pay for qualified expenses directly. Just be sure to keep receipts and documentation for anything you withdraw.

    Why Saving Now Still Matters

    Even if you’re starting school soon, saving now can still help. Every dollar you contribute to a 529 account is a dollar you may not have to borrow later. And if you’re spacing out your program over a few years, like many part-time or online students, you’ll have time to build up savings between semesters.

    Plus, using a 529 account can help you stay organized. Instead of pulling from your emergency fund or racking up credit card debt, you’ll have a dedicated account just for your education.

    Take the First Step

    Going back to school is a big decision, and a smart one. Whether advancing your career, switching fields, or pursuing a long-held goal, a 529 account can help you do it with more confidence and less financial stress.

    So, if grad school is on your horizon, take a few minutes to explore how a 529 account can support your next chapter. Open an account, run the numbers, and start saving. Your future self will thank you!

    About the author:

    Ivey Brooke is the marketing intern for Commonwealth Savers, formerly known as Virginia 529.

    By: South Carolina State Treasurer Curtis Loftis, Administrator of Future Scholar College Savings Plan

    For years, I have encouraged families in my state to save for their child’s education with South Carolina’s Future Scholar 529 Plan. As a strong advocate for 529 plans, I applaud families everywhere who make consistent 529 contributions. They have shown their commitment to helping cover their child’s necessary expenses when taking the next step in their education journey.

    Families who choose to save in a 529 account to cover college expenses can celebrate reaching their important goal when they begin withdrawing 529 funds – tax-free – to pay for qualified education expenses. Understanding how 529 distributions work will make the process simple.

    How to Use 529 Funds: Step-by-Step

    First, know what your 529 funds will cover.

    For higher education, your funds will cover tuition, fees, books, supplies, computers, equipment, meals and housing (if your student is at least a part-time student) for eligible educational institutions – including two- and four- year public and private colleges throughout the U.S., international schools, graduate and professional programs, trade schools and registered apprenticeships. 

    Your child may also use 529 funds for off-campus housing and meals. However, any costs associated with living off-campus should not exceed the room and board allowance your school has identified as “the cost of attendance.” You can usually find information on the cost of attendance on the college’s website. 

    When using 529 funds to purchase books, be sure the books are required reading for the course your child is enrolled in. The same goes for computer programs. Computers and computer software must be for educational purposes and not related to games or hobbies.

    That’s not all. With the recent passage of the One Big Beautiful Bill Act of 2025, funds in 529 accounts can now be used for more qualified expenses than ever before. This legislation expands the definition of qualified educational expenses to include additional costs associated with K-12 education, tutoring, standardized testing fees, and much more. In addition, the costs associated with obtaining and maintaining certain professional credentials, certifications, and licenses are now also considered qualified expenses under the new law.  

    Next, add it up.

    Add up all your qualified education expenses, then subtract from the total any tax-free educational assistance you will receive, such as tax-free scholarships, educational assistance from a qualifying employer program, or veteran’s education assistance. This step helps you determine the amount you will need to withdraw from your 529 account.

    Your plan administrator will provide you with Form 1099-Q listing your 529 withdrawals for the year. Remember, your withdrawals for qualified education expenses will not be taxed. If you use funds for non-qualified purposes, your earnings, but not your contributions, will be taxed at ordinary income rates plus a 10% federal tax penalty, in most cases.

    Then, withdraw your funds.

    When it’s time to request a distribution from your 529 account, most plans will allow you to make your withdrawal request electronically on their customer portal, by mail, or by telephone. Usually, the most efficient way to receive your funds is to have them deposited directly into your bank account. From there, you can easily submit the payment to your child’s school electronically or reimburse yourself if you have already paid for the qualified education expenses. 

    If you choose to have funds deposited into your bank account, be sure to update your bank account information with your 529 plan at least 30 days before you plan to withdraw funds. Also, check that your account’s email and mailing address are current so you receive all important updates. 

    When you withdraw 529 funds is important.

    Withdrawing money from your 529 account at the right time is crucial. Withdraw your funds in the same calendar year – not school year – as you incurred the expenses so that the year’s withdrawals match up with the year’s education expenses for tax purposes. 

    For example, if you pay for spring semester classes in December of 2025, you should request your distribution for reimbursement by the end of 2025. Do not wait until your child begins spring semester classes in 2026. You can always withdraw the funds earlier in 2025 in anticipation of paying tuition in December.  

    Save your receipts of expenditures and list all distributions for your records. At the end of each calendar year, you can go through your receipts to make sure you have withdrawn funds for all qualified education expenses. Be sure to allow time for your 529 plan administrator to process your withdrawal request to make sure all processing is completed in the same calendar year.

    Congratulations on a job well done.

    You chose to provide your loved one with the important gift of education. You saved to help your child achieve the goal of a successful future, and it’s now time to reap the reward of your dedication to that goal. Best of luck to your family and your very lucky beneficiary!

    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.

    Whether you’re saving for one child or six, use these saving strategies to reach your education savings targets.

    Start Early. When you’re managing a budget for a growing family, saving for the cost of future education can be daunting. Let time work on your side by setting aside as much as you can while your children are young. Starting early allows you to make modest contributions that can benefit from compounding interest over time.

    Make a Plan. Setting an education savings goal can help you stay on target and on track. To make a plan, start with an online savings calculator. Many 529 plans have state-specific calculators that give you an estimate of what future education expenses will be at your dream college or university. The number you see may feel unattainable, but saving early, often, and strategically can be a great way to reach your goal.

    Save Systematically. Whether you set up recurring contributions from a bank or payroll direct deposit, saving systematically is an automated way to build your savings quickly. Consider directly depositing $150 per pay period into your 529 account. After 26 pay periods in a calendar year, you would have nearly $4,000 in contributions to your 529 account. 

    Adjust as Needed. At least once a year, take a moment to review your contributions, your investment growth, and the needs of your family, and adjust your automatic contributions. Increasing automatically is an option for many 529 plans, but it’s never a bad idea to take the opportunity on 529 Day or during college savings month to boost your contributions. It’s often said that when your child reaches their next milestone (out of diapers, out of daycare, etc.), it’s a good time to increase the contribution amount. Whatever works best for your family, be sure to assess and adjust.

    Why this Matters: Funding post-secondary education can seem far away when your children are still in diapers, but 18 years can fly by. Making a plan and sticking to it can accelerate your education savings and relieve the financial burden of post-secondary education when the time comes, especially when you are saving for more than one beneficiary. 

    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.

    Photo courtesy of Lael Oldmixon. Pictured are her two beneficiaries, who are no longer this small. 

    By Troy Montigney, Vice President, Ascensus

    Automation has the power to change your life. No, I’m not talking about artificial intelligence (thankfully, that’s a conversation for another time and place) – rather, a time-tested behavioral trick: investing through payroll direct deposit.

    Much like your employer might support your retirement and healthcare savings needs by pulling 401(k) and health savings account (HSA) contributions from your paycheck, you can consider taking the same approach to saving for education. 529 plan contributions for your loved ones can be made by direct deposit, all before your take-home pay is deposited into your checking account.

    My experience

    When I first started saving for education, I made an initial, one-time deposit and patted myself on the back. “I’m YEARS ahead of the game!” I thought. That momentary high soon gave way to doubts. When should I make my next contribution? Can I be doing more? How much is college really going to cost in 18 years?

    By this point, I was used to directing my pay in multiple directions for various needs. Thankfully, my employer’s payroll process allowed yet another account to be added to my deposit instructions, and the 529 plan I use offered a smooth experience and clear information to help establish the link.

    Over five years have passed, and I’ve never touched this piece of our financial puzzle again.

    Tuning out the noise

    Many of the people I’ve looked up to in my life subscribe to a “control what you can control” mindset. We’re all part of a complex global economy, and headlines of the day, especially those concerning our wealth and pocketbooks, can be distracting at best and panic-inducing at worst.

    Amidst literal swings of markets, payroll direct deposit lets you control what you can control. Choose your education savings goal and fearlessly march towards it, without regard for everything else you might hear over dinner conversations or encounter in your Instagram feed.

    Dollar-cost averaging with an assist from direct deposit

    While there’s some debate about whether it’s better to make periodic, large lump-sum investments or smaller, recurring ones, I’m a fan of the latter because they help us overcome the mental blocks I just described.

    By definition, investing at the regular interval of your paychecks means you will buy in when the market is near its all-time high, when it’s pulled back a bit, and everywhere in between. Over time, you can avoid the impulse to time the market strategically. Spoiler alert: this doesn’t always work out, and if you’re worried about timing your entry point, you’re more likely to try to time your exit as well.

    Maximizing current state tax benefits

    While the long-term, potential tax-free growth of 529s is their most impactful benefit, up-front tax incentives for contributions are made available to taxpayers in 37 states and the District of Columbia. In most cases, these are capped at a specific amount per taxpayer or each beneficiary for whom they are saving.

    Making your 529 contributions via payroll direct deposit can let you carefully and gradually work towards maximizing current state tax benefits, instead of scrambling before a year-end or Tax Day deadline to “hit your limit.”

    Our family’s contributions are designed in just this way: split evenly between our two children (since our home state’s incentive is per taxpayer rather than per account beneficiary) and totaling a little more than the state tax credit limit annually.

    Direct deposit doesn’t require a large paycheck

    In recent years, most 529 plans have lowered their minimum contributions to make saving for education a possibility for almost anybody. The most common minimums are $10 or $25, but many plans have no minimums for contributions made via payroll direct deposit or any contribution at all.

    That’s all to say: you can do this without a ton of income to spare.

    Make no mistake, it’s not always convenient to have another large chunk of my paycheck disappear. But as seasons of heightened spending come along, or unplanned expenses are confronted, we have taught ourselves to pull back elsewhere rather than sacrifice our commitment to saving for our kids’ education.

    This feels empowering rather than restricting. In sticking to our plan and continuing to use payroll direct deposit, I trust that we are investing in a future with less worry and more hope (no matter what happens with AI)!

    About the author

    Troy Montigney is the proud father of 529 Day baby Sophie and her younger sister Molly. By day, he is Vice President of State Retirement Programs at Ascensus. Previously he served on its industry-leading 529 team, which helps over 8 million people save for education via 51 plans serviced across 31 states and the District of Columbia.

    Please note: A plan of regular investment cannot assure a profit or protect against a loss in a declining market. This testimonial is not necessarily representative of the experience of other investors and is no guarantee of future performance or success.

    By: South Carolina State Treasurer Curtis Loftis, Administrator of Future Scholar College Savings Plan

    December 17, 2024

    It goes fast, doesn’t it? Just when you’re comfortable with the back-to-school routine, here come the holidays. Take a deep breath and enjoy the season – 2024 version.

    But once the decorations are packed up and the wrapping paper is in the trash, I hope you’ll set aside a few moments to get ready for a very different kind of season: tax time. You’ll want to be sure to close out the year strong to be in the best situation when tax day rolls around.

    Timing is everything

    Taxes are usually due on April 15th of each year – unless the day falls on a weekend. However, this tax season will be different for some states. Because of the devastation of Hurricane Helene, all of Alabama, Georgia, North Carolina, and my state of South Carolina will have their taxes due on May 1, 2025. In addition, parts of Florida, Tennessee, and Virginia will have also have their taxes due on May 1, 2025.

    Get motivated

    Begin by estimating your federal income tax bill for the year. You can find your tax bracket and standard deduction information on the IRS website. Your federal tax estimate will motivate you to consider using a win-win strategy that can lower your state tax bill.

    Save for the win

    One of the best moves you can make to subtract from your state tax bill actually involves adding to your own education savings. By contributing to your 529 college savings account, you could reap the benefits of state tax incentives now. More than thirty states and the District of Columbia offer tax incentives to families who save with a 529 plan. These states allow families to deduct at least some percentage of their contributions from their taxable income. Four more states offer tax credits a family can use to offset state income taxes.

    The tax savings can be significant. South Carolina allows residents to deduct 100% of the amount they contribute to Future Scholar, South Carolina’s 529 plan, on their SC state income tax return. It’s an excellent benefit for the citizens of my state. Review your plan to find out if you can benefit from tax savings, too.

    Deadlines matter

    Of course, there’s no deadline to contribute to your 529 account. However, if you want your contributions to qualify for tax savings for your 2024 tax returns, you’ll need to know your state’s deadline. Most states will have a deadline of December 31, 2024, to claim a deduction on your 2024 state income tax returns, but a few states, like South Carolina, allow contributions to be made until taxes are due. Be sure to consult your plan to determine the deadline for contributing funds you can claim on your 2024 return.

    Be a front loader

    The IRS has a special gifting feature that will allow a larger amount of money to be given at one time. Called frontloading or super funding, this feature gives your funds the ability to compound for a longer time than they would if you were making regular annual contributions.

    Through frontloading, your 529 plan may be funded up to the 2024 annual exclusion of $18,000 for a single person or $36,000 for a married couple. When you front-load, you contribute a one-time gift of the amount that is usually allowed over five years – without paying gift taxes.

    With frontloading, a single person can contribute $90,000 per child in one year and enjoy the benefits of compounding interest on a larger amount. The contribution will be removed from the contributor’s taxable estate and treated by the IRS as if $18,000 were given per year for five years. Of course, any contributions made beyond this amount over the five years could be subject to federal taxes. A financial professional can help you decide if front-loading could work for your family and your financial situation.

    Earmark your refund

    Expecting a tax refund in 2025? Decide today to use it to invest in your child’s future education. Earmark it for a lump sum contribution to boost your 529 college savings. That way, you know you’re using it for something meaningful.

    Appreciate your genius

    While you’re enjoying the last few days of 2024, take a minute to appreciate how wise your decision to save with a 529 account really is. You’re saving for college tax-free, and when the time comes to use those 529 funds to pay for qualified education expenses like tuition, books, computers, and room and board, you’ll be withdrawing your funds tax-free, too. Congratulations – genius move.

    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 Luke Minor, Director of Washington State’s College Savings Plans (WA529)

    November 5, 2024

    With Halloween behind us, one would normally ditch the thrills and chills and go all in on sweater weather and copious quantities of pumpkin spice-flavored whatnots. But this November, the fright fest continues for me in light of a recent and shocking revelation…

    I was at a financial empowerment conference last month focused on increasing banking access for underserved individuals and communities. It was a powerful and eye-opening event that gave me a lot to consider in how well my organization supports Washington residents in saving for future education and career readiness training. But something I learned that day continues to haunt me – when my daughter turns five in just three short months, her spending habits will become chiseled in stone for the rest of her life and there’s nothing I can do to stop it.

    In the modern misinformation age, I was naturally skeptical and dug a little deeper. It turns out that this dynamic has been studied and findings suggest that children begin developing associations with money and spending habits at a very young age. And interestingly, it appears that such habits do not necessarily reflect those of their parents. So, um, yeah…my almost five-year-old, who is already gaining independence at an alarming rate, will soon be destined for a life of frivolous indulgence or miserly self-deprivation and I will have no say in the matter. As Scooby Doo’s pal Shaggy would say “Zoinks!”

    Of course, I’m being alarmist and am at risk of spreading my own misinformation, so let me set the record straight. While sobering, I am treating this new point of learning as an opportunity to reexamine my own financial priorities and help my daughter develop a healthy relationship with money. And importantly, I am inspired to work harder in helping financially empower families and individuals throughout my state and across the country.

    The good news is that collectively, organizations across sectors and localities already have countless resources and policy interventions to help. The challenge is how to best knit together this patchwork so we can aid as many individuals and families as possible in their journey towards building their education, financial security, and generational wealth. We discussed this at length at the conference mentioned above, and were able to tease out several actionable steps we can take:

    This speaks to the immense value and impact that organizations such as our very own CSPN, ASPN, and NAST wield. For years, I have marveled at the collective power our association to share best practices, build cross-sector relationships, and advocate for positive change at the systems level. My call to action for all of us within CSPN is to build on this already strong foundation. Let’s keep up the great work, grow our villages, and not be overcome with same fear I started off this conversation with! Here are some ideas to get us going:

    As that cliché and sometimes cringy motivational posters in office walls across the country persistently remind us: “Teamwork makes the dream work!”

    _____________

    About the Author

    Luke Minor is the Director of Washington State’s College Savings Plans (WA529), which include the GET Prepaid Tuition Program and the DreamAhead College Investment Plan. Since 1998, tens of thousands of students have used more than $2 billion of their WA529 savings to attend colleges in all 50 states and at least 15 foreign countries. In his free time, Luke enjoys getting outside to hike, ride bikes, and even splash in a puddle or two with his wife, rambunctious four-year-old, and young-at-heart dog.

    By Trisha Good, Executive Director, Ohio Tuition Trust Authority

    National Transfer Student Week, set for Oct. 21-25, 2024, focuses on the education journey of students who start at community colleges or trade or vocational schools and then transfer to a four-year college.

    Not only is a community college a good way to transition from high school to a higher education institution, but starting at one can help families save more funds in their 529 accounts as the attendance costs are usually less expensive. Therefore, the number of credits a student can transfer from a lower-priced institution to a higher-priced one can significantly lower the costs of a higher education. 

    If you look at the national average price, a credit hour at a community college credit hour costs $150, while the average cost of a credit hour at a four-year public institution is $406. If your child earns 10 credit hours at a community college on required core classes that will transfer to other four-year program schools, the average cost would be $1,500. If your child took the same 10 credit hours of required core classes at a four-year college or university, the average cost would be $4,060. By taking the same prerequisite courses that will transfer to a four-year program, you could save $2,560 in your 529 account by starting at a community college.

    Like saving for college, the key is starting the transfer planning process as early as possible. Once at a community college, your student should tell an academic advisor that they eventually want to transfer. With that information, they can choose courses that will completely transfer to the next college. And once your student knows where they want to transfer, they will need to contact their current school’s transfer office (usually in the registrar’s office) for advice on how to prepare. Then, they will also need to contact their future college’s transfer office for their recommendations and transfer policies. 

    Taking general education courses at a lower-priced community college is a smart way to save money in your 529 account and potentially have your student graduate early. If interested, contact your child’s home school’s transfer office to find out where the school has transfer agreements, and the courses guaranteed to transfer and apply toward their degree. 

    Prior Learning Assessments (PLA) can also gain your student transfer credits. PLAs evaluate a student’s learning outside of a traditional educational environment. Your student can earn college credits in one of two ways. One way is credit by exam, like tests created by the College Level Examination Process or CLEP. The other way is through a portfolio that contains a student’s applicable education learning. Members of the military and veterans can also turn their military experiences into credit. The American Council on Education (ACE) created college credit recommendations surrounding the Joint Services Transcript (JST), which the Army, Marine Corps, Navy, and Coast Guard use. 

    Transferring credits from a community college to a four-year program can reduce college costs and stretch your 529 savings funds. If you and your student are deliberate with your actions, and diligent in your research, the transfer process can work well for you and your college savings. 

    If you’d like to learn more about saving for your children’s future higher education, visit collegesavings.org or search for your home state’s 529 program. 

    About the author: Trisha Good is the executive director of Ohio Tuition Trust Authority. Since 1989, Ohio Tuition Trust Authority has sponsored and administered Ohio’s 529 College Savings Program, CollegeAdvantage. Ohio’s 529 Plan oversees more than 676,000 accounts and over $17.6 billion in assets as of June 30, 2024. Visit CollegeAdvantage.com or call 1-800-AFFORD-IT (233-6734) for more information.

    Busting the biggest myths about 529s

    By Ashley Durham, senior writer, my529

    September 17, 2024

    This just in — If you have extra 529 funds, why not send your furry friend to obedience school by leveraging the new 52k9*?

    *In truth: 529 plans haven’t gone to the dogs — and “52k9” is not a qualified education expense. That means you can’t change your beneficiary to your good pup, either, though they are a member of the family (just not for tax purposes).

    There are, however, several real misconceptions about what 529 plans are and what they can do, myths that plan representatives often encounter when speaking with community members and prospective account owners.

    Myth: I didn’t open a 529 account when my child was a baby. It’s too late to get started.

    It’s true that opening a 529 account when a child is young can give any contributed money the potential to grow over time. The earlier an account owner starts, the better, as they can maximize the effect of time on their savings. The next best time to open an account, though, is today. If a student is in junior high or high school, any funds set aside can still be put toward qualified education expenses. While the money they save may not pay for their education in full, perhaps they could cover a few semesters’ worth of books and supplies or room and board, in turn reducing the need for student loans. Saving — even small amounts — costs less than borrowing because of the interest required with repayment.

    Myth: I don’t want my funds tied up if I have money left over in my 529 account.

    529 plans provide flexible options for account owners if funds remain after a beneficiary completes their education. Account owners can change the beneficiary to another member of the family so that the new beneficiary could use the funds for their education. They can preserve a legacy account for the next generation, such as a grandchild. And now people can roll over unused funds to a Roth IRA for the beneficiary, with certain restrictions, a new option that has proven popular since it went live in January 2024. They can also choose to withdraw the funds with the awareness that the earnings, not their original contributions, are subject to taxes and penalties. Bottom line: The money in their 529 account is theirs, so they can determine the best course of action, consulting their tax advisor if necessary.

    Myth: Why should I save? I worked my way through college and my kid can do that, too.

    Many parents and guardians take pride in their experience of working their way through college with a summer or part-time campus job. They expect their child could do the same.

    However, as tuition increases continue, that scenario becomes much less likely. For context, from a recent College Board publication, in 1993-94, the average published tuition and fees for public four-year colleges and universities was the equivalent of $5,380 today. In the 2023-24 academic year, the numbers for tuition and fees for the same institutions totaled $11,260. (Note: All numbers include an inflation adjustment.)[1]

    Certainly, a student could work while attending college to offset costs, but their efforts may not yield the same results as the previous generation. Plus, balancing work hours with coursework could hinder grades or progress toward graduation. Funds set aside in a 529 account could make a marked difference toward completion of a certificate or a degree. Account funds could pay for some or all of a beneficiary’s education expenses, leaving more time to focus on their studies and lessening the likelihood of student loans.

    Myth: My child will receive a scholarship, so they won’t need a 529 account.  

    Scholarships and financial aid can be vital components of a family’s educational planning. Consider the value-add of a 529 account: It could complement a scholarship, as the award amount may not pay for everything their child needs for their higher education experience. For example, if a scholarship covers tuition and fees, other qualified education expenses like room and board, books, supplies, and computers could factor in.

    Additionally, if a 529 account’s beneficiary receives a scholarship, the owner of the account can withdraw 529 funds up to the amount of the scholarship without incurring a 10% federal tax penalty on earnings. (The earnings portion of the withdrawal, however, would be subject to federal and state income taxes.)

    Myth: My child is more interested in pursuing a technical education, so 529 funds won’t work there.

    Technical colleges, trade schools, and registered apprenticeships can be destinations for students and their 529 funds. As students have myriad options for postsecondary education, the term “college” has expanded beyond the traditional definition. 529 plans encompass a wide range of eligible educational institutions, including two-year and four-year colleges and universities, technical colleges and trade schools, graduate schools, and registered apprenticeships. Beneficiaries can use their funds close to home or across the country, as long as the school is eligible to participate in federal student aid programs.

    Important Legal Notice

    Investing is an important decision. The investments in your account may vary with market conditions and could lose value.

    About the author:

    Ashley Durham is a senior writer at my529, Utah’s educational savings plan. She was an educator at the secondary level for 17 years, where she taught Advanced Placement English Literature and Composition, among other courses, and wrote countless college recommendations for high school seniors. Ashley has a master’s in education from the University of Utah. She has been with my529 since 2015.

    [1] Jennifer Ma and Matea Pender, “Trends in College Pricing and Student Aid 2023,” College Board, 2023, research.collegeboard.org/trends.

    By Trisha Good, Executive Director, Ohio Tuition Trust Authority

    August 13, 2024

    Does your child’s upcoming school supply list seem to go on and on? According to a 2024 Deloitte report, most families expect to spend about $586 on school supplies this year. Before you head out to the stores or order online, check these savings strategies to reduce how much your family may have to pay to prepare for the new school year.

    Save with what you already have

    Being a smart shopper, most likely you’ve bought standard school supply items throughout the year when you found them at a good price, or at the end of last year’s back-to-school season when the supplies were on clearance. So, check around the house to see if you already have some of the required school items before you start to tackle this year’s supply list. Also, check your children’s backpacks to see what supplies they brought home before the start of summer. By using last year’s items that are still in good shape, and your school supply stock, you can cross off these materials off the list.

    Save with other families

    An adage says, “It takes a village to raise a child.” Many of your friends are in the same boat, spending a lot of money to prepare for their children’s new school year. Join forces with them to see if you can bring down everyone’s school supply costs. If someone finds a good deal on pencils, have them pick up extra for the group, and someone else can search for the best price on binders. Divide and conquer the supply lists and share the bounty with others. With multiple people searching for the best prices, the final cost should be lower for everyone. Also, check if your local online frugal friends, buy/sell/trade or free groups on social media have school supply items to share.  If you have any extras, make sure to place them in these groups as well.

    Save by sticking to the list

    There are always supplies that catch your or your children’s eyes when shopping. Make a budget before going and stick to the teachers’ requested supplies list. Explain to your children that you are sticking to the budget so if they find another item that they want, then they are welcome to spend their own money on it. In addition, if you’re going to a store to shop, spend cash only. It makes it easier to stick to the list when you know that you have a set amount of funds on you.

    Save with state sales tax holiday

    Does your home state have a sales tax holiday weekend? If so, then take advantage of those tax savings and tie it in with back-to-school sales as well. You can then deposit those extra savings into your child’s 529 plan to continue supporting their education after high school.

    The sales tax holiday is a great “money moment” to teach your children about delayed gratification. If you give your children a certain amount of dollars to buy their own school supplies, including clothes, then this can be a lesson on how to stretch their dollars. Look for the current prices of items for the upcoming school year. Next, figure out the state sales tax for these items. Then you can look to see if the stores will discount these items’ prices during the sales tax holiday. Therefore, if your child can wait for the sales tax holiday, then they can potentially save money two different ways—with lower prices and no sales tax. Together, you can figure out how much those savings would be so your child can see the real monetary benefit of waiting to buy the items. You can also talk about saving the extra funds in their 529 higher education savings account. You can add a little extra encouragement to save by matching the funds they add to their future education.

    Save with Upromise

    Many 529 programs have partnered with Upromise, a free rewards program that offers its members cash back as you shop online, dine out, buy groceries, and book flights and hotels. If you choose to shop for your children’s school supplies with Upromise, make sure you visit stores that offer financial incentives to shop there. Once you accrued the cash rewards, you can transfer those funds to your 529 account that has been previously connected to your Upromise account.

    It’s never too late to save

    If you haven’t started to save for college costs, visit CSPN’s website to learn more about 529 plans. Be sure to check out your home state’s 529 program first—as a resident, you may receive additional state income tax deductions or credit. Every dollar saved in a 529 account is a dollar that isn’t borrowed. This makes a 529 college savings plan an excellent alternative to student loan debt.

    If you have been saving in a 529 plan, take these additional steps, add those savings to your 529 account, and watch how it grows! Even small 529 plan deposits can grow through the power of compound interest, tax-free earnings, and tax-free withdrawals for qualified higher education expenses.

    About the author:

    Trisha Good is the executive director of Ohio Tuition Trust Authority. Since 1989, Ohio Tuition Trust Authority has sponsored and administered Ohio’s 529 College Savings Program, CollegeAdvantage. Ohio’s 529 Plan oversees more than 676,000 accounts and over $17.6 billion in assets as of June 30, 2024. Visit CollegeAdvantage.com or call 1-800-AFFORD-IT (233-6734) for more information.