529 Day Raises Awareness about the Benefits of Saving for Higher Education
One-third of Americans have heard of 529 college savings plans but only one in five
know what the plans are for. That’s according to a survey released by the College
Savings Plans Network ahead of 529 Day, recognized annually on May 29th (5/29). The
study, which identified a connection between 529 awareness and saving for higher education,
was done in anticipation of the network’s national 529 awareness campaign launch in March. The campaign, which involves state treasurers, higher education
agencies, financial service firms and other state officials in 28 states, aims to
make “529” a more recognizable term for all Americans who want to save for college.
“The UA College Savings Plan celebrates 529 Day as a way to raise awareness about
affordable and portable options Alaskans have to save for higher education,” said
Lael Oldmixon, director of the University of Alaska College Savings Plan. “Saving
as little as $40 a month in a 529 Plan account can add up to about $15,000 over 18
years. Money saved in a 529 plan grows free from federal and state income tax, and withdrawals remain
tax-free when used for qualified education-related expenses at any accredited higher
The study found that those who are aware of 529 plans are much more likely to be saving for higher education. The survey indicates that a little knowledge can go a long way and should be a motivating factor this 529 Day. 529 Day is observed by state 529 plans throughout the country as an opportunity to increase awareness of the college savings plans.
“Celebrate 529 Day by investing in a child’s future,” said Oldmixon. “Parents, grandparents, aunts and uncles can contribute to a 529 College Savings Plan as a one-time gift or ongoing contribution.
Families that save small amounts earlier,may end up with more than if they had saved
larger amounts later.”
Based on assumptions built into the campaign’s 529 investment calculator, setting
aside $10 a week over 18 years to invest in a 529 plan can add up to around $15,000
– half of the average student debt upon graduation. Conversely, the College Savings
Plans Network estimates the cost of not saving that amount, and having to borrow and
repay with interest, would amount to $21,650 in student debt.
For more information about the UA College Savings Plan visit www.uacollegesavings.com.