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.
In an industry that is still relatively young, Alaska’s 529 Plan is coming of age and bears witness to increased outflows to career and technical colleges, community colleges, liberal arts colleges, and large universities nationwide. The Plan has helped thousands of beneficiaries successfully complete their degrees and enter the workforce they dreamed of in elementary school and now these same beneficiaries have started to save for their children. This is the best result we could hope for.
The UA College Savings Plan seeks to inspire a culture of education and to support the workforce needs of Alaska. September is College Savings Month, as proclaimed by Governor Bill Walker. Oldmixon encourages all families to take time this and every month to nurture their child’s career goals, evaluate their college savings needs and goals, and take advantage of Alaska’s 529 offering, the UA College Savings Plan.