The Coming Of Age Of Alaska’s 529 College Savings Plan

The door to my son’s third grade classroom is lined with photos of each student with subtitles beneath them declaring their future careers.

Children with savings accounts six times more likely to attend college

These range from “Future Paleontologist” to “Future Firefighter” and “Future Gold Miner.” Decidedly, these kids each have a vision for what their future entails and nearly every career listed on the door involves some level of degree attainment past high school. The children will refine their paths to future careers, possibly changing the vision along the way, and most of them will still require post-high school training.

Colleges and universities nationwide, and especially here in Alaska, have responded to workforce demands by offering a wide swath of degrees and certificates at career and technical colleges, liberal arts colleges, and universities. In tandem, 529 plans, also known as college savings plans, have become a standard, tax-advantaged, tool used by families to save and help fund a loved one’s future education expenses.

The significance of owning a college savings plan account for a child cannot be understated. Children with savings accounts in their name are six times more likely to attend college and every dollar saved today (with the potential of earning compound interest) is a dollar less borrowed and two less that will have to be paid back later (with interest). As such, setting the expectation of post-high school education and helping the child save is an effective strategy for empowering them to achieve their dreams.

Alaskans are saving. The UA College Savings Plan, Alaska’s 529 option since 2001, manages more than 38,000 funded accounts for more than 34,000 future students. Approximately 14,000 Alaskans elect to invest half of their or their child’s PFD into their account each year, employers across the state offer payroll deduction as an option to their employees, and account holders can make direct contributions from their bank and set up automatic monthly contributions to make systematic contributions. The GoTuition Gifting Portal is the Plan’s newest online tool, which allows gift givers to transfer funds to a another account.