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National 529 Day is recognized on May 29 (5/29, get it?), highlighting the importance of 529 savings plans in helping families plan and pay for college or training expenses.
Vermont’s 529 savings plan, the Vermont Higher Education Investment Plan, is administered by VSAC for the state to help Vermont families prepare for education expenses. It’s the only savings plan that offers Vermont taxpayers a Vermont state income tax credit on annual contributions deposited for college or training after high school.
This year, VSAC and the VT 529 plan are celebrating 529 Day by providing some much-needed graduation fanfare for the VT high school graduates of the Class of 2020. May 29, 2020 falls on the second Friday of our “Have takeout on us!” event: Every Friday through June 26, five winners will be randomly chosen to receive $50 of tasty takeout from their favorite local restaurant or food business, plus each winner gets a $50 VSAC Gift of College card to use for future college or training expenses. And there’s another incentive to enter, too: Each VT high school grad of 2020 who posts a photo using #VSACDelivers and tags @802VSAC qualifies for the grand drawing for $529 from VHEIP to be held by June 30, 2020.
VSAC and VHEIP are also supporting a little fun this year. As sponsor of Prom Goes #VTstrong airing on VPR May 30, we encourage students from around the state to tune in, kick up their heels, and celebrate one of high school’s most memorable traditions.
But Vermont’s 529 plan isn’t just for high school students or those already in college. It benefits families with children of all ages, from babies to grad students and even adults returning to training.
“College savings accounts are clearly a powerful tool,” notes Scott Giles, president and CEO of VSAC. “We encourage parents to get started early to save for college and other career training. The ideal time to begin saving is between birth and age 5 in order to allow your investment to build over time.” But it’s never too late to start saving – and 529 plans can help you fund a child’s future education with even small amounts, whatever the age of your child
That's important because all Vermonters will need some form of education or training after high school to be qualified for Vermont’s future jobs. Research shows that students from families who save just modest amounts (less than $500) for education are 3x more likely to go on to college or training and 4x more likely to graduate from a program.
What is a 529 plan? A 529 plan is an education savings plan designed to help families set aside funds for future college or training costs, with tax advantages to help make saving easier. The plans are named after Section 529 of the Internal Revenue Code, which created these types of savings plans in 1996. Most 529 plans are operated by state agencies.
What if you can’t save right now? During these challenging times, many Vermonters are focused on simply meeting today’s financial needs. There’s just no wiggle room for saving. We understand that.
The College Savings Plan Network, an affiliate of the National Association of State Treasurers (which provides information on 529 plans throughout the country), has offered some guidance about saving for college during COVID-19. You can view the full article, but here’s one key point worth repeating:
Adopt a “do-what-you-can” mantra for continuing to save for college or training. If you’re not able to contribute as much to your 529 as you did previously, that’s okay. Give yourself a break. If it’s doable for you, even just setting aside $15 a month to invest in your 529 can add up over time. Keeping your future goals in mind is important. And if you can’t save anything right now, learning about the benefits of 529 plans is the place to start, so you can save when your situation improves.
National 529 Day is a great time to begin. Find out more about Vermont’s 529 savings plan at vheip.org, and join us in congratulating the accomplishments of the Class of 2020 and Vermont students of all ages!