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4 Reasons to make saving for college or training part of your back-to-school routine

Written by
VSAC Staff

September 1, 2023


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Back-to-school can mean anything from drop-off at daycare, a first big yellow bus ride, a shiny new set of tools, or move-in day in a dorm. And while students of all ages are headed back to school, September is also National College Savings Month. By preparing now for the future education opportunities for your children (and grandkids), the savings will be there for them whenever they need it.

Here are four reasons to get started now for education costs:

1. Vermont has a plan to make it easy … with a VT tax credit to help you save more

Named after Section 529 of the Internal Revenue Code, 529 plans are designed to help families of all income levels set aside funds for higher education. Most 529 plans are operated by state agencies, like VSAC. Vermont’s program benefits family members of all ages, from babies to college and grad students as well as adults returning to training.

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Description automatically generatedCalled VT529, the plan was created by the VT Legislature to help families like yours prepare for college or training expenses … with tax-free advantages that help those savings go farther.

As Vermont’s official 529 savings program, it’s the only 529 plan that gives Vermont taxpayers a 10% state income tax credit on annual savings deposits. Married couples filing jointly can claim a state tax credit of 10% of the first $5,000 contributed to a VT529 account each year – for a total tax credit of up to $500 for each beneficiary. (Single taxpayers can claim up to half of that amount, or $250 per beneficiary per year.)

2. VT529 savings help your kids prepare for the jobs of the future

Planning now for education after high school can mean greater opportunities for the future with more jobs at better earnings.

Nearly all of Vermont’s most in-demand and highest-paying careers require some form of education or training after high school. For Alex and Kristina Umbhau of Cornwall, VT, who both have college degrees, it was important to make sure that education option would be affordable for their daughter. To prepare, they decided to open a VT529 savings account before their baby was even born, last May.

“Our goals are, like most parents, to have a happy, healthy little girl, which may, a very long time from now, include upper education,” says proud dad Alex Umbhau, whose daughter was born on May 29. After looking through various 529 options, the Umbhaus decided to open their daughter’s account through the VT529 plan, because of the Vermont state tax benefit.

“My wife and I were both fortunate enough to have our parents help us pay for our undergraduate studies,” says Alex. “Recognizing the impact that this had on our post-graduation trajectory, we feel that we should do as much as we're able to provide our daughter with this same financial head start.”

With a 529 plan, you get to choose what that future education looks like: VT529 funds can help pay for tuition, computers, room and board or off-campus housing, travel, fees, and the costs for apprenticeship programs or retraining at institutions throughout the U.S. (as well as at schools in Canada and around the world). You can even use the funds to pay back student loans. And there is no age or time limit on when your savings are used.

3. Starting small now can add up over time

What if you can’t save a lot right now? If like many Vermonters, you’re focused on meeting today’s financial needs, you may feel that there’s little extra for saving. But you may be surprised what a difference saving even small amounts can make over time. You can open an account with just $25 (or $15 with payroll deduction).

“College savings accounts are clearly a powerful tool,” notes Scott Giles, President and CEO of VSAC. “We encourage parents to open a VT529 account and get started early to save for college and career training to allow your investment to build over time.”

Alex notes that his parents instilled in him the importance of saving via long-term, compounding growth. “It’s something I believe is generally under-taught, and which I very much want to teach to our daughter,” he says.

“The Umbhaus are ahead of the curve. But it’s never too late to start saving, even if your child is in high school, college or graduate school,” says Giles, adding that relatives and friends can also help fund a child’s VT529 account through birthday, holiday and graduation gifts. Loved ones can contribute online through e-gifting, and you can also purchase “Gift of College” gift cards, which are available in $50 increments at all Vermont locations of Kinney Drugs and Cumberland Farms stores.

The important thing is to begin saving now, with whatever you can afford.

National College Savings Month is a great time to learn about the benefits of 529 plans and start preparing for your loved ones’ education. Any family who has questions or would like help in setting up an online account can email

4. Enter for a chance to win $529 in savings for education during September!

During National College Savings Month this September, VSAC invites you to enter our online drawing to kick-start your VT529 savings. One lucky individual will be randomly selected to win $529 in education savings.

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Description automatically generatedThe VT529 drawing runs from September 1 to September 30, with one winner chosen to receive $529 in a new or existing VT529 account. Any Vermont resident or VT529 account owner may enter online during the entry period. You do not need to have an existing VT529 account to enter. See the official rules and entry form at

Need help with education goals? VSAC is here to assist you. You can also contact us at 800-642-3177, 8 a.m. to 4:30 p.m., Monday through Friday, and by email at