The easiest way to save an additional $25 for college is to open a 529 savings account in Utah today on 5/29.
Utah's official 529 plan, the Utah Educational Savings Plan, will match contributions up to $25 for accounts opened with a new resident account owner for a new beneficiary until 5 p.m. today.
"There are many options available to Utah residents to save for a child's future education, but 529 plans are unique," said UESP director Lynne Ward. She said the plans include provisions that the money remains tax-free if it is used for higher education, there is a tax benefit to saving and there are no age restrictions for a beneficiary, among other benefits.
"Utah taxpayers benefit from the state tax credit and tax-free earnings on the account, and the beneficiary receives an investment in their future," Ward said.
The plans are increasing in popularity across the country, reaching an estimated $108.7 billion at the end of the first quarter of 2008, according to data developed by Financial Research Corp. and released Wednesday by the College Savings Foundation.
"Given the colliding forces of credit crunch, reduced home equity values and increased college costs, we believe that this is a watershed moment for parents to shift from a debt mind-set to a savings mind-set," said CSF Chairman Kevin McMullen. He said most families surveyed said they expected it would take at least five years to dig out of their debt to send their kids to college.
In the past year, the average annual tuition costs of attending a four-year public or a four-year private college or university have increased by nearly 6 percent. Including room, board and expenses, the total costs average more than $13,000 per year for a public school and more than $30,000 for a private institution, according to the College Board. If costs continue to climb at the same rate, in 15 years it could require more than $100,000 to get a four-year degree.
Ward said college degrees and certificates will be more difficult to obtain without proper planning, and the importance is ever-increasing.
"A higher education will be a necessity for our future generation to succeed and the economy to prosper," she said.To qualify for the matching contribution, new account applications, including an account agreement, must be received at the UESP office or online by 5 p.m. Information about UESP and 529 plans, as well as downloadable applications, can be found online at uesp.org or by calling toll-free 800-418-2551.