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College costs continue to rise, but I am convinced a postsecondary education is worth every penny. I have witnessed, and experienced, the many positive returns.
My parents did not have the means to help me save much or finance my postsecondary education. To obtain the degree I wanted, I used funds available through work-study, a summer job, scholarships, grants and loans. The loans were my primary method of paying for college. No, I didn't love the long-term process of paying off my student loan principal and interest, but I would make the same financial decision again. I knew the degree would advance my career.
I have two children of my own now and my goal is for them to have the means to go to college, the ability to select a major and career path of their choice, and to incur minimal debt. My husband and I would also like our children to have life-changing experiences like living on campus, studying abroad and internships.
Thankfully, today's families have a tax advantaged way to save for their child's education through 529 college savings plans. When our first child was born we opened a University of Alaska College Savings Plan account with his Alaska Permanent Fund dividend by checking yes on question six of the PFD application. This is a simple way to save and as a bonus, a contributor is randomly selected each year to win a $25,000 scholarship that can be used at almost any college, university, technical or trade school in the U.S.
May 29 is national 529 College Savings Day. The UA College Savings Plan is celebrating this date with savings plans across the country. As the director of Alaska's college savings program, I would like to invite you to reflect on the importance of saving for college.
Consider the following:
* Savings have the potential to go further in a 529 plan than other investment accounts because earnings are tax-deferred and tax-free if the account is used for qualified higher education expenses such as tuition, books, fees, room and board. You can use savings in conjunction with scholarships and other financial aid. There are no income or age limitations and you can use the funds at accredited colleges and vocational schools throughout the country (and even a few internationally).
* You can begin saving in the UA plan with as little as $25 a month. One option is to save automatically through payroll deduction. If your employer hasn't already joined the UA plan's payroll deduction option, we can help them get started! You can also set up automatic contributions from your bank account or to contribute by check.
* Anyone can contribute to your colleges savings plan account. Share gift contribution slips with friends and family and encourage them to give a gift that will last a lifetime. You can mail contribution slips to your relatives (grandparents, aunts, uncles, etc.) to encourage them to contribute to the college savings accounts for birthdays, graduations – you name it. Let's face it, the last thing kids need is another toy, quickly forgotten, and with 200-plus tiny pieces to clean up.
This 529 Day, I hope you will take a moment to explore the UA plan, talk about planning for college with your kids, and join our Facebook community. As always, my team is here to answer any questions about the program (907-474-5671) and you can learn more by visiting www.uacollegesavings.com.
Lael Oldmixon is executive director of the University of Alaska Scholars Program and the College Savings Plan.
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