This year on May 29 (aka National 529 Day), we’re celebrating the 20th anniversary of 529 college savings plans. Named after section 529 of the Internal Revenue code, “qualified tuition program,” 529 plans were intended to make it easier for American families to save for college.
How 529 plans help families save
It’s no secret that the cost of college has risen over the years. Most experts predict the trend to continue with some studies estimating costs over $300,000. 529 college savings plans, like Edvest in Wisconsin, help parents save toward that cost. For example, Edvest accounts can be opened with just $25, and have options to make saving simple including direct deposit, the ability to contribute online, and the option to let friends and family members gift to your child’s account.
You may not wind up saving the entire amount of your child’s tuition. But, the more your child has saved by college, the less he or she will need to borrow in the form of student loans. That means the amount of debt your child has to repay after graduation could be far less than if he or she had no college savings. What’s more, Edvest funds can be withdrawn free from state or federal taxes when they are used for qualified higher education expenses.
529 plans are popular
Data from the past 20 years shows that 529 college savings plans have grown in popularity. In 1996, the first year they were in use, families invested $2.4 billion in the plans. Today, 529 plan assets total around $253.2 billion.
Individual account size – how much each family has saved – has also grown over the years. In 1996, the average amount saved was around $9,600. Today it’s closer to $20,190. Part of the reason for the increase is that any earnings in the accounts have the opportunity to grow free from state or federal income tax meaning more money stays (and potentially grows) in your account.
Celebrate 529 Day with Edvest
It’s never too late to start saving for your child’s higher education expenses. Getting started with Edvest, Wisconsin’s Official College Savings Plan, can be done in about 15 minutes with just $25.
With a variety of investment options to choose from, low fees, and tax advantages for qualified Wisconsin residents, Edvest makes it easier for more families to save for college. Why not celebrate 529 plans turning 20 by opening an account or contributing to one today?