A Message from State Treasurer Michael L. Fitzgerald
September 20, 2012
For families already busy juggling the demands of work and home, college planning might seem like the last thing to worry about. However, with the cost of a higher education rising faster than inflation, nearly every family will face the problem of how to pay for it when the time comes. Thankfully, the answer is quite simple – start saving today. By starting early, saving regularly and making smart investment choices, families can make their savings work for them – and College Savings Iowa is here to help.
In the past 35 years the cost of obtaining a college education has increased by 1,120 percent, which is four times faster than the consumer price index.* With continuing increases in the price of a college education, it is as important as ever to start saving early. Any amount, saved on a regular basis can grow into a substantial amount, which may help reduce the need to borrow to cover educational expenses.
College Savings Iowa, administered by the State Treasurer’s Office, is a budget-friendly 529 plan that offers multiple investment choices, as well as significant federal and state tax benefits to help families grown their savings even more. An account can be started with as little as $25 and the assets can be used to pay for qualified higher education expenses at any eligible college, university, community college or accredited technical training school in the United States or abroad. Iowa state taxpayers can deduct up to $2,975 in contributions per beneficiary account from their 2012 adjusted gross income.**
As a way to help families start saving, we are celebrating College Savings Month throughout September and giving away a $5,290 College Savings Iowa account – our largest giveaway to date. For more information and to enter the giveaway, please visit www.my529iowaplan.com any time before November 30.
Don’t forget…saving for college is an investment for a lifetime – opening the door to a world of opportunity for the children in your life. Start saving today and help make college a reality for them – you’ll be glad you did! For more information about College Savings Iowa, visit www.my529iowaplan.com or call 888-672.9116.
*From Bloomberg.com. Colst of College Degree in U.S. Soars 12 Fold: Chart of the Day. August 15, 2012. Michelle Jamrisko and Ilan Kolet.
**Adjusted annually for inflation. If withdrawals are not qualified, the deductions must be added back to Iowa taxable income. The earnings portion of nonqualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements.
Investment returns are not guaranteed and you could lose money by investing in the plan. Participants assume all investment risks as well as responsibility for any federal and state tax consequences. If you are not an Iowa taxpayer, consider before investing whether your or the designated beneficiary’s home state offers any state tax or other benefits that are only available for investments in such state’s qualified tuition program.
For more information about the College Savings Iowa 529 Plan, call 888-672-9116 or visit www.collegesavingsiowa.com to obtain a Program Description. Investment objectives, risks, charges, expenses, and other important information are included in the Program Description; read and consider it carefully before investing. Vanguard Marketing Corporation, Distributor.
College Savings Iowa is an Iowa trust sponsored by the Iowa State Treasurer’s Office. The Treasurer of the State of Iowa sponsors and is responsible for overseeing the administration of the College Savings Iowa 529 Plan. The Vanguard Group, Inc., serves as Investment Manager and Vanguard Marketing Corporation, an affiliate of The Vanguard Group, Inc., assists the Treasurer with marketing and distributing the Plan. Upromise Investment Advisors, LLC, provides records administration services. The Plan’s portfolios, although they invest in Vanguard mutual funds, are not mutual funds.