Saving for College with 52909/16/2016
In the year 1173, construction of the Leaning Tower of Pisa began in Italy. After more than three centuries, the great leaning tower was finally completed. The architects had not originally designed for the tower to lean, but because of poor planning and an uneven foundation, the Leaning Tower of Pisa will never stand straight.
Laying a firm foundation at the start of any project is essential to success. Whether you build a city or plan for your child’s future education, you want to plan and lay a strong foundation.
In Arkansas, we are helping parents of young students do just that through the Arkansas 529 GIFT College Investing Plan. Throughout the month of September, which is College Savings Month, one kindergarten student in every county in Arkansas will be eligible to receive $529 in a GIFT college savings plan account.
Here’s how it works. Every kindergarten student can participate by sending in their artwork and a parental consent form to the State Treasurer’s Office by September 30th. Then, early in October, a random drawing will be held to select one winner from each participating county to receive a $529 award in an Arkansas 529 GIFT College Investing Plan. The official rules, entry form and parental consent form are available online at arkansas529.org.
The Arkansas Department of Education, the Arkansas State Treasury and the Arkansas 529 GIFT College Investing Plan Review Committee have joined together to sponsor this initiative – working to help spread awareness of the importance of starting to save early for a college education. And with the Arkansas 529 GIFT plan, parents and grandparents can start saving money for their child’s college education one day at a time.
Once a student is ready to go to college or vocational school, all 529 qualified withdrawals that cover higher education expenses like tuition, computers, books or room and board, are exempt from state and federal income tax. That means your savings go directly toward paying for your student’s college with no tax penalty.
Consider this – If a parent or guardian puts just four dollars every day into a 529 fund, in just five years, you could have saved more than $8,200 – all for the price of a large cup of coffee. If you continued to contribute at the same pace and gain five percent interest each year, in 18 years, more than $42,000 could be available to help your student afford a college education.
As governor, I have the privilege of helping to lay a solid foundation for our state through job creation, improving education and marketing Arkansas to the world. Everything we do today will have an impact on our state and on our families. And there’s no better time and place to start setting a firm financial foundation for our future college students than today, in Arkansas.