Saving for College the Smart way - 529 Plans

Utah announced today that it has hit a big milestone for the Utah 529 plan — 200,000 opened accounts. Here’s the press release:

200,000 Utah Educational Savings Plan Accounts Open and
Saving for Higher Education

(Salt Lake City) Today marks the opening of the 200,000th Utah Educational Savings Plan (UESP) account. Prashant Desai and his wife, Mona, from Missouri City, Texas, opened the account in behalf of their seven-year-old son.

Prashant says they chose to save with UESP for its low fees, high-quality investment options, and top rankings. “UESP is one of the most cost-effective programs out there,” says Prashant. “It’s an extremely well built 529 program.”

The Desais understand the importance of planning and preparing for higher education expenses. Both Preshant and Mona have advanced degrees, and their son is already planning to follow in their footsteps. “A 529 plan account will give our child the foundation to complete his education,” Prashant says.

“We are delighted the plan has reached 200,000 accounts,” says Lynne Ward, Executive Director of the Utah Educational Savings Plan. “UESP’s growth in accounts and assets under management shows that more and more families are dedicated to saving for a loved one’s future college expenses.”

UESP has experienced a steady increase in the number of accounts since its inception in 1996, when Duane Hill, UESP’s first account owner, opened UESP’s first account for his granddaughter Marley Rose Hill-Filben.

Opening an account was “the most natural thing in the world,” says Duane Hill. “I benefitted from my higher education degree, and I certainly hope the same for Marley.” Marley began her college studies this past fall.

UESP is dedicated to one purpose—helping families save for college. That’s why UESP has among the lowest fees of all 529 plans and requires no minimum or ongoing contributions. Earnings on UESP accounts are federal and state tax-free when used for qualified higher education expenses. Utah taxpayers have an added benefit of a 5 percent state income tax credit for qualified contributions.

For more information about the Utah Educational Savings Plan, visit uesp.org, call UESP at 800.418.2551 or e-mail info@uesp.org.

The Utah 529 plan has a special Christmas gift for Utah residents that open a new account: a $25 bonus.

Here are the details:

Now is the best time to open a Utah Educational Savings Plan (UESP) college savings accounts for your kids, grandkids, or other loved ones. Enjoy a $25 matching contribution compliments of Zions Bank by opening an account by December 30, 2011, and using promotional code 1112HOL. (The account owner and beneficiary must both be Utah residents and new to UESP.) Visit www.uesp.org/pdfs/2011-Holiday-Promotion.aspx for complete details.

Sure, it’s a marketing gimmick.  But it’s a good one to shed light on the importance of saving for college.

May 29 has been deemed “529 College Savings Day”.

Some 529 plan operators are holding giveaways in conjunction with the day.  For example, the Utah 529 Plan is giving away four $529 UESP college savings certificates.
With that $529 being invested, it could add up to a lot more by the time your child or grandchild goes to college.

We’re all trying to save for college.  But aside from your typical 529 plan, hopefully you’re counting on your traditional cash savings to help out.  The only problem is right now it’s probably earning close to 0% at the bank.

That’s why you should check out the Sallie Mae High Yield Savings account.  It’s currently paying 1.4%.  You can also get a certificate of deposit at up to 3%.

And if you use Upromise, you can get a bonus automatically deposited into your Sallie Mae account.

Every year, a number of states make changes to their 529 plans.  It’s hard to keep up with all of these changes, but I do an annual review of the programs to update some of the most common changes:

-Increases to maximum contribution limits
-Changes in in-state tax benefits and deductions

This year there are some good changes and bad changes.  Although many states have increased tax deductions, some have dropped matching grants as they struggle with budget deficits.

You should double check your state here to look for any changes:

Also, some states do better than others at keeping their informational web sites up-to-date.  If you notice any errors in my updated numbers, please let me know.