MINNEAPOLIS, May 25, 2016 /PRNewswire/ -- This year on May 29 (aka National 529 Day), the Minnesota College Savings Plan is celebrating the 20th anniversary of 529 college savings plans. Named after section 529 of the Internal Revenue code, "qualified tuition program," 529 plans were intended to make it easier for American families to save for college.
How plans help families save
It's no secret that the cost of college has risen over the years. Most experts predict the trend to continue with some studies estimating costs over $300,000. 529 college savings plans, like the Minnesota College Savings Plan, help parents save toward that cost. For example, Minnesota College Savings Plan accounts can be opened with just $25, and have options to make saving simple including direct deposit, the ability to contribute online, and the option to let friends and family members gift to your child's account.
Participants may not wind up saving the entire amount of their child's tuition. But, the more a child has saved by college, the less he or she will need to borrow in the form of student loans. That means the amount of debt they have to repay after graduation could be far less than if he or she had no college savings.
529 plans are popular
Data from the College Savings Plans Network's recent 529 Report show that over the last 20 years 529 college savings plans have grown in popularity. In 1996, the first year they were in use, families invested $2.4 billion in the plans. Today, 529 plan assets total around $253.2 billion. Individual account size – how much each family has saved – has also grown over the years. In 1996, the average amount saved was around $9,600. Today it's closer to $20,190. Part of the reason for the increase is that any earnings in the accounts have the opportunity to grow free from state or federal income tax meaning more money stays (and potentially grows) in your account.
Celebrate 529 Day with the Minnesota College Savings Plan
It's never too late to start saving for your child's higher education expenses. Getting started with the Minnesota College Savings Plan, Minnesota's Official College Savings Plan, can be done in about 15 minutes with just $25.
With a variety of investment options to choose from and low fees, the Minnesota College Savings Plan makes it easier for more families to save for college. For more information or to open an account, visit www.mnsaves.org.
About the Minnesota College Savings Plan
The Minnesota College Savings Plan, Minnesota's official 529 college savings plan, makes it easier for families to save for higher education expenses. It takes just $25 and 15 minutes to start a Minnesota College Savings Plan college savings plan and fund saved can be used at colleges, technical schools and grad schools nationwide. Additionally, funds may be used for books, supplies, or other qualified expenses – not just tuition. Ranked as the fifth lowest fee direct-sold 529 plan in the nation by Strategic Insights, the Minnesota College Savings Plan was also named as one of the nation's top performing direct sold 529 plans by SavingForCollege.com.
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SOURCE Minnesota College Savings Plan