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Spring Clean Your Finances

By Young Boozer, Alabama State Treasurer
Vice Chairman of the College Savings Plans Network

April 21, 2014

It’s time to spring clean your finances. You won’t need a mop, bucket or soap. You don’t need to get down on your knees and scrub. But you will need to gather some tools and some supplies. And you will need to get busy.

Americans have just completed the annual ritual of filing their income taxes for 2013. The data is fresh. The numbers are current. Now is the time to begin spring cleaning your financial house to get into “spic and span” shape for the rest of this year and beyond.

Get prepared for a clean start. Stack up your family wages and income. Dust off those deductions. Scrub expenses to make sure you are using your resources in the most efficient manner. What you will uncover is how much you can clear for savings and investments. It’s a residue you can live with.

Believe it or Not, Your Kids are Paying Attention & Your Savings Efforts Make a Big Difference

By Ryan Betz, Associate Director of Marketing & Communications, Washington Guaranteed Education Tuition (GET) program
April 8, 2014

Since I was a young boy, I was told by my parents that college would be a part of my future. It was an opportunity my parents never had and they knew how important a college education was to my future success as a person and as a professional. At an early age, my parents began saving for my higher education and they told me about the funds that were set aside to help with tuition, books and other costs. I got a part time job in high school and the dollars I earned were also set aside to help pay for school. 

Looking back as an adult now working in the college savings field, I can see the accuracy of a recent study from the Center of Social Development at Washington University in St. Louis. The study concluded that children with a college savings account are seven times more likely to attend a four-year college, compared to children with no dedicated account. I guess it goes back to that old adage, “actions speak louder than words.” As a kid I can vividly remember never once questioning whether or not college was going to be a part of my future, because I knew that resources had been set aside for my education. 

New Proposed Federal Legislation Supports Families Saving for College

By Joan Marshall, executive director, College Savings Plans of Maryland
April 4, 2014

I’m excited about a new bill that was introduced last week in the House of Representatives (HR 4333) because it is designed to help those who are currently investing in 529 plans and encourage even more families to save for college with these great tax-advantaged, convenient and affordable plans. The main enhancements this bill would provide for college savers include: 

  • Making computers an eligible expense – Currently, families can only use funds from their 529 accounts for computers and related equipment (without taxes and the 10% federal penalty) if the college has a written policy requiring the purchase of a computer for the student’s attendance at that college. While a few colleges have this policy, most do not.  However, we know that nearly every college student needs some sort of computer or laptop to successfully complete college level work.
  • Allowing for investment changes up to four times a year – Currently, investors in certain  529 plans can move their funds from one investment option to another once per calendar year. This new provision would expand this to up to four times per year, which would allow quarterly re-balancing as well as the ability to respond to periods of unusual market volatility. 
  • Allowing the redeposit of funds in certain circumstances (e.g. a student gets sick at the beginning of the term) without negative tax implications – As a state 529 plan administrator, I personally know of families who have used funds from their plan to pay for college expenses, only to have a serious illness or other unusual event cause their student to have to leave college unexpectedly. With this provision, if the college provides the student with a full or partial refund, those funds can be re-deposited into the 529 account under certain circumstances so the account holder does not incur negative tax consequences and can hopefully re-use the funds in the future.
  • Allowing funds from a 529 account to roll over to a Roth IRA under certain circumstances (e.g. a student receives a scholarship for their final year of school or graduates early) – In my opinion, this is one of the more creative solutions to some of the questions that many families ask before they are willing to commit to saving in a 529 plan: “What if my student does not go to college?” or “What if I save too much money and have funds left over?” With this provision, again within certain limits, families would have the ability to roll over unused funds (up to $25,000) to a Roth IRA for either the student or the account holder in the event that the funds cannot be used for higher education. Yes, taxes would be paid on any earnings at that point, but the federal penalty (10% of any earnings) would not apply. 

This bill is the result of hard work by many in the 529 community, including states and their private sector partners.  The entire 529 community owes a great deal of thanks to Representative Lynn Jenkins of Kansas and Representative Ron Kind of Wisconsin for being the lead sponsors of this bill, along with HR 529 that provides other enhancements to 529 college savings plans. 

I hope that everyone who takes the time to read this message will contact their member of the House of Representatives and ask him/her to sign on as a co-sponsor of HR 4333. The more co-sponsors this bill has, the more likely it will be to become law. As long as you know your zip code, http://www.house.gov/representatives/find/ is an easy way to locate your representative.

About the Author:
Joan Marshall is the Executive Director of the College Savings Plans of Maryland, which offers both a 529 prepaid tuition program and a directly-sold 529 savings plan. Together, the plans have more than 215,000 beneficiaries with investments of more than $4 billion. Marshall is a past Chair of the College Savings Plans Network (CSPN) and is Co-Chair of the CSPN Federal Initiatives Committee.

Tax Refunds Can Boost Your College Savings

By Paul Paeglis
Executive Director, Ohio Tuition Trust Authority

March 31, 2014

According to a recent survey by the financial services firm Edward Jones, only 8% of respondents said they planned to invest their tax refunds.  With the average refund exceeding $3,000, it may be tempting to spend it, however, you can make a significant impact on your college savings by saving some, or all, of your refund in a 529 college savings account for your children.

If you are already a college saver, consider contributing your tax refund into your existing 529 account.  If you haven’t started saving for college yet, using your tax refund is an easy way to open a 529 savings account for your child, grandchild, or other loved one.

Financial Literacy & Consumer Focused Legislation Highlight Treasurers' Conference

By Betty Lochner, Chair of College Savings Plans Network
March 24, 2014

There are two things I really enjoy in life. One is visiting our nation’s capital. The other is watching Saturday Night Live. For years, I have been a lucky person because it seems like these two things always seem to find each other in funny satire political skits. Whether it’s Will Ferrell impersonating President George W. Bush or Jay Pharoah taking on the persona of President Barack Obama, you never have to look too hard to find humor in American politics. 

As easy as it is to poke fun at our country’s leaders, a trip to D.C. reminds one what a tough and big job our federal leaders have. From the economy to education and foreign policy to the environment; each day brings a new set of challenges for our elected officials. They are consistently pressed for their time and attention, just like many of us with our own jobs. The key to their success --like our own -- is having an understanding of a variety of topics, issues and subject matters, while not losing sight of the big picture and remembering what’s most important.

Create Your Own Pot O' Gold this St. Patrick's Day

By Iowa State Treasurer Michael Fitzgerald
March 17, 2014

As State Treasurer of Iowa and administrator of College Savings Iowa, I frequently have the opportunity to talk to grandparents about saving for their grandchildren’s future education costs. As a grandparent, you want to help prepare the next generation to succeed. One way to accomplish this is to start saving for those future costs. Since I am still in my first year as a grandparent, this has never been more of a reality as it is now.

As I watch my grandson, Michael, grow and begin to pull himself up to take those first steps, I can’t help but think about the first steps he will hopefully be taking towards his college education in less than 18 years. That’s why I will not simply rely on luck this St. Patrick’s Day. Instead, I am taking concrete steps by making a contribution to Michael’s College Savings Iowa account. When it comes to paying for his college expenses, luck is not enough.

New CSPN Data Indicates Continued Growth for College Savings Plans

By Betty Lochner, Chair, College Savings Plans Network
March 11, 2014

Today, the College Savings Plans Network published its 2013 Year-End 529 Report, which features aggregated data from the 103 savings and prepaid tuition plans across the nation. The report includes evaluated assets held in 529 accounts, the average size of 529 accounts, and the percent of contributions and distributions in 529 accounts for the time period of Jan. 1, 2013 through Dec. 31, 2013.

We’re happy to report sustained and continued growth of plans nationwide. The following are the highlights from the report:

  • Total Investment: Total investment by American families in 529 plans has reached a record level of $227.07 billion.
  • Total Assets: In 2013, total assets in 529 plans grew by $36.35 billion dollars. 

You can participate in almost any 529 plan across the country.View All

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