Why didn’t I know about 529 Plans? My student debt experience was a nightmare. I wish I could have set up a 529 for my kids.
Sound familiar? When I was the director of Washington’s 529 Plans, I heard this a lot. And I’m guessing that, with $1.5 trillion in student loan debt nationally, you have your own horror story on student debt to tell. For many, it becomes a barrier to opportunities, or a huge burden after graduation. But it doesn’t have to be that way for your children.
September is National College Savings Month. It’s a month dedicated to building college savings awareness. We strive to help you learn about the availability and importance of college savings and the benefits of doing that through a 529 college savings plan.
So let’s use this month of awareness to reevaluate where you are in saving for your child’s college education.
If you already have a 529 account, give yourself a high-five!
If you haven’t set one up, now is the time. Every little bit helps and it’s never too late to start. For those who already have a 529 plan in action, take time to review your plan. Here are a few questions to help you with the process:
- Are you contributing monthly?
Even a small monthly contribution will make a big difference in their future.
- Can you increase your monthly contribution, or add a monthly contribution?
Go over your budget and revisit your priorities.
- What does your child want to do when he or she grows up, and what kind of an education do they need to accomplish that goal?
Start talking to your child now about their educational dreams. It’s never too early or too late to start that conversation. Research shows that children who know they have a 529 account are six-times more likely to continue their education after high school.
- How much will college cost for your child? What post-high school expenses will they have?
529 plans can be used to pay for expenses at a community college or technical school, a public or private college, even some schools abroad. After you figure how much you can save, determine if that will cover all educational expenses, and if not, determine how much they may need to borrow to make up the difference.
- Do others in your child’s life know that she has a 529 college savings plan?
Don’t be shy — put the account number in birthday invitations, on Christmas lists, baby shower invitations and any time you have the opportunity. This allows friends and family to go online and make contributions directly into your child’s 529 account. People (especially grandparents) love to give the gift of experience. Help them out by making it easy and just ask. My husband and I contribute to our three grandchildren’s 529 accounts regularly on their birthdays and at Christmas.
If you don’t have a 529 account, it’s time to reevaluate that as well.
Planning now for your child’s future education is one of the best ways to hedge against debt. And, there are tools out there to help you do just that. Last March, a national 529 awareness campaign was launched called the “Roadmap For Their Future” movement. The goal is to make 529 a common household number so that every family learns about the opportunity for post-high school education without a lifetime of debt.
Check out the tools and resources available at 529forcollege.com
About the Author
Betty Lochner is the owner of Cornerstone Coaching & Training. She is a former Chair of the College Savings Plans Network and former director of Washington’s 529 Plans. She continues advocacy work to bring awareness to 529 plans through her work on the “Roadmap For Their Future” national awareness campaign.