It’s May 29!
If You Don’t Know Why We Celebrate the Day, You Should…
IT’S COLLEGE SAVINGS DAY!
It’s May 29th, otherwise known as 5/29, and while most families may not be celebrating the date, many families with college aged students are certainly thankful for it.
May 29th is National 529 College Savings Plan Day, a date recognized every year to celebrate and highlight 529 College Savings Plans, those college-savings investment accounts that are permitted to grow tax free and remain tax free when funds are withdrawn for college, including everything from tuition to housing, books and meals. And since last year, families have been able to use $10,000 annually from those funds toward their children’s private, primary education.
At a time when the price of education is bankrupting families and saddling our young people with a lifetime of crippling debt, these plans are something every family with children should focus on and invest in.
As a college student, my family faced a financial disaster that nearly forced me to withdraw from college. Determined to get my degree, I was fortunate that was able to take on jobs, secure loans and apply for grants that allowed me to finish school and ultimately go on to law school. That was a life changing experience for me.
Years later, as an attorney for the Senate Finance Committee, I was able to draw from my personal experience and was proud to have co-authored the law that opened the door for the bevy of 529 Plans that are available to families today.
Today, as the mother of three girls, the need for such plans has taken on a renewed sense of urgency for my family. Unfortunately, while many celebrate the creation of these 529 Plans, too many families are still unaware or unable to take advantage of the plans.
Recently, the New York Times issued a disturbing report showing that families throughout the nation are largely unaware of the savings plans. The newspaper reported research from the College Savings Plans Network, which promotes 529 Plans, indicating only a third of Americans have heard of the savings accounts. Only one quarter, the report said, understood the plans were intended to be tax-free investment vehicles to enable families to save and build up funds for a child’s education.
The news report added data from the Morningstar investment research firm estimating that only 16 percent of parents with children younger than college age have launched a 529 Plan.
Today, I am trying to remind everyone I know of the availability of 529 Plans and urging them to tell their friends, neighbors and family. We cannot fix the student debt crisis overnight. But we can work to prevent others from falling into debt, in part, by making more families aware that 529 Plans are available and improving lives.
Jersey First President Rosemary Becchi is a leading tax policy lawyer and consultant who was formerly counsel to the majority staff of the U.S. Senate Finance Committee. Becchi helped author the 529 College Savings Plan. She is currently a Strategic Advisor and Counsel at Brownstein Hyatt Farber Schreck, where she specializes in tax and financial services matters.