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WINOOSKI (August 30, 2019)— Summer may be winding down, but September festivities for National College Savings Month are just beginning.
As families settle into fall school routines, this is an ideal time to establish a habit of contributing to savings for your child’s future education. Because starting on September 1, in addition to savings and tax benefits with the Vermont’s 529 college savings program—the Vermont Higher Education Investment Plan—families can get a chance at some great prizes.
To remind families about the importance of saving now for college or career training, VSAC, which administers Vermont’s 529 savings program, is holding a September drawing for five $100 deposits into a new or existing college savings account and prize packages, including passes to the ECHO Lake Aquarium and Science Center, Vermont’s state parks, and Vermont’s state historic sites. Any Vermont resident or any VHEIP 529 account owner can enter the drawing for a chance to win.
Here are 5 more reasons why saving now for future college or training makes sense:
#1. Saving for college helps create future education opportunities & greater earnings.
#2. Saving even a little adds up over time. And a 529 makes it easier to save.
529 plans were developed specifically to help families save for college and career training, with tax advantages to make it easier. The plans are named after Section 529 of the Internal Revenue Code. Because 529 plans can be opened with just $25, they’re accessible for families at most income levels. And by saving early and contributing regularly, families can be better prepared to help pay for college or other training when their children are older.
#3. VHEIP is the only college savings plan that offers a Vermont income tax credit.
As Vermont’s official 529 college savings program, the Vermont Higher Education Investment Plan is the only 529 plan that gives Vermont investors a state income tax credit on annual contributions: 10% of the first $2,500 contributed per beneficiary, per year ($5,000 contributed per beneficiary, per year, for spouses filing jointly). That’s a tax credit of up to $250 per beneficiary account per year ($500 per beneficiary per year for joint filers) for Vermont taxpayers saving for education after high school.
#4. Saving in a 529 plan helps reduce education debt.
Seven out of 10 families need to access education loans to help pay for college expenses. By putting aside even modest savings now, families can reduce their reliance on loans and earn interest rather than pay interest on money borrowed to cover those costs.
#5. Saving in a 529 plan is preferable for financial aid considerations.
Many parents think that if they save for college or future training now, their child won’t receive as much financial aid. In fact, saving in a 529 account is advantageous for financial aid compared with other savings programs: Funds in 529 plans are considered the parent’s asset rather than a student’s asset for federal aid, so they have a minimal impact on financial aid. Read more about how it works here: How does a 529 plan affect financial aid? And check out the Top Myths About 529 Plans at vheip.org.
Have a question about saving, planning, or paying for college or career training? Ask us! Find online info about saving for college, email us at email@example.com, or come see us Monday–Friday, 8:00 am–4:30 pm, at the VSAC Resource Center in Winooski.
The Vermont Higher Education Investment Plan, a 529 college savings plan, was established in 1999 and is Vermont’s only state-sponsored 529 plan and as such the only 529 plan eligible for the Vermont income tax credit on contributions. VHEIP is administered by the Vermont Student Assistance Corp. and managed by Intuition College Savings Solutions. For more information about setting up a VHEIP account, visit www.vheip.org or call the customer service center at (800) 637-5860.
About VSAC – Changing Lives through Education and Training since 1965
Vermont Student Assistance Corporation is a public, nonprofit agency established by the Vermont Legislature in 1965 to help Vermonters achieve their education and training goals after high school. VSAC serves students and their families in grades 7-12, as well as adults returning to school, by providing education and career planning services, need-based grants, scholarships and education loans. VSAC has awarded more than $600 million in grants and scholarships for Vermont students, and also administers Vermont’s 529 college savings plan. Share your VSAC story by email to myVSACstory@vsac.org or submit a video to YouTube. Find us at www.vsac.org or check in on Facebook and Twitter. #changing lives