Opening presents can be fun, but are more toys really what the child in your life needs?
This holiday season, parents and grandparents are being encouraged to give a gift that will greatly impact their child’s or grandchild’s future.
“The sooner families begin financing a child’s college education the better. Time is definitely on your side if you start early,” said Robert Stern, Program Manager for the Minnesota College Savings Plan, the state’s official 529 plan.
According to U.S. News & World Report, tuition and fees average $31,381 per year at private colleges for the 2014-2015 school year. At public colleges, out-of-state students will pay an average of $19,867 per year while in-state students will pay an average of $8,709 per year.
In Becker County, there are 136 account holders with a total amount saved as of 10-31-14 of $1,910,721. The average amount saved per account is $14,049.
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Tuition at the University of Minnesota, the school where the majority of the Minnesota College Savings Plan’s account holders ultimately send their students, is $13,626 for legal residents of Minnesota, North and South Dakota, Wisconsin and Manitoba; and $20,876 for all others for the 2014-2015 school year.
“Plan changes made earlier this year make now the best time in our plan’s history to open an account,” said Stern. “Fees are now less than one-third of one percent, making our plan one of the least expensive 529 plans in the country. We have also added four new fund options, and increased the contribution limit for each account to $350,000.”
All earnings in the plan’s investments grow tax-free as long as the funds are used for qualified expenses at any college, university, trade or career school in the nation and some foreign countries.
Accounts can be opened with as little as $25, and there is no limit to the number of accounts a child can have in his or her name. The account owner has total control over the account at all times; and if the intended recipient decides not to go to college, the account can be transferred to another family member.
