Whether their child is focused on Little Tikes cars, training wheels, or driver’s licenses, all parents have one thing in common: the desire to give their child the best possible future. According to College Foundation of North Carolina, college graduates earn more money, live a longer, healthier life, and are reportedly more satisfied with their work.¹ With that in mind, a college education is a logical next step for many high school students.
According to the National Center for Education Statistics, approximately 69% of students who completed high school enrolled in either 2-year or 4-year higher education institutions in the fall after high school graduation, a 6% increase from 2000.² While enrollment rates are increasing, the cost of a college education seems to get more expensive every year as well. When you add up the cost of tuition, books, and living expenses, the significant expense of college can be overwhelming.
The average cost of a college education in North Carolina (for in-state tuition) is about $26,590 per year. Multiplied by the standard 4 years it takes most students to earn a bachelor’s degree, a family can expect to spend over $100,000 to send each child to college in today’s environment. Footing these higher education bills takes years of preparation and accumulation, and a great option is investing in a 529 savings plan.
Last Friday, May 29th, was National 529 Day. A 529 plan is a tax-advantaged college savings plan, designed to encourage savings and invest money for future education costs. A 529 plan carries few restrictions while offering significant benefits to both the account holder (typically a parent or close family member) and the student.
Additionally, recent tax reform law through the Tax Cuts and Jobs Act of 2017 and the SECURE Act of 2019 have the expanded the value of 529 plans.
With the COVID-19 pandemic sweeping the nation, sending students from the classroom to online learning, things have certainly changed in the world of education; however, parents still want to make sure their kids are given opportunities that will positively impact their children’s future. In honor of National 529 Day, we put together a short video for our clients that provided a high level overview of 529 plans, highlighting what this particular college savings and investment option can do for families, as well as the recent changes that were passed by legislators over the past couple of years.
There can be a lot of confusion around funding higher education but understanding the ins and outs of 529 plans may provide you with a wealth of knowledge and college savings potential. As a valued member of our business community, we wanted to share the knowledge with you as well.
We invite you to view the video by clicking here, or please reach out to us directly at [email protected] if you have specific questions. We are here to guide you forward.
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