Utah Education Savings Plan is breaking records

With college costs on the rise, more and more Utahns are saving for their children's higher education today.

The Utah Education Savings Plan, a 529 investment portfolio, finished up a record year in 2006 with nearly 1.9 billion in assets and 87,000 accounts. Between Thanksgiving and Dec. 29, roughly 4,500 new accounts opened and $85 million came in as contributions, making that month a record for the Utah plan.

Roughly 23 percent of the 87,000 UESP accounts are owned by Utahns, with the majority of account holders buying from out-of-state, because of the recognition Utah's plan has received nationally, said Lynne Ward, director of UESP.

"We've just grown incredibly," Ward said. "One big reason to set up a UESP account is that it's sending the message to the child that we want you to go to college; we expect you to go to college."

Ward added that one of the reasons Utah's plan has been cited in national reports is because of its low fees and because it has no minimum contribution required to start an account. Some account holders simply have $5 from each paycheck deposited into an account for the child.

Grandparents make up a bulk of account owners who have opened accounts for family members. Parents are also opening up accounts as soon as children are born, Ward added.

In a UESP account, money grows tax-free as long as it is used for approved educational purposes when the child goes to college. Such expenses include tuition, room and board, books and software needed to attend school. If a student receives a scholarship or does not need the money, the account can be transferred to another child's name.

The account owner also gets state tax deductions of up to $3,120 per account for contributions made that fiscal year.

"It really isn't too late to save. Even if somebody is entering college next year, they can still set up an account," Ward said.

Utah Education Savings Plan by the numbers

Total

Assets: $1.9 billion

Accounts: 87,000

Utah account holders: 23 percent

November-December 2006

Accounts opened: 4,500

Contributions: $85 million

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E-mail: estewart@desnews.com