Today is 529 Day – and a recent survey by Edward Jones shows that 62% of Americans do not know that 529 plans are college savings investment tools. Marylanders have an even better reason than most to know about 529 plans – since Maryland’s College Investment Plan is ranked “top” by Morningstar. Of 52 plans ranked in 2010, only four other plans received a “top” rating.
College tuition costs are increasing at twice the rate of inflation, and show no signs of stopping. Hardly a day goes by without news reports about student debt burdens. According to the Project on Student Debt, two-thirds of college seniors graduated with loans in 2010, and they carried an average of $25,250 in debt. These students also faced the highest unemployment rate for college grads in recent history at 9.1%.
By locking in on a savings plan early, parents can stay ahead of rising costs and help their child graduate without the burdensome debt faced by so many college students.
The State-sponsored College Savings Plans of Maryland offer two options to choose from – the Maryland Prepaid College Trust (buy tomorrow’s tuition at today’s prices) and the Maryland College Investment Plan (a more traditional investment plan). They are each based on different savings strategies and have distinct benefits.
The College Savings Plans of Maryland offer affordable and flexible options. The plans can be used to pay for private or public two year or four year colleges and universities almost anywhere nationwide, even some trade schools.
The plans offer unique benefits for Marylanders – these plans are the only 529 plans that offer a Maryland State income deduction on contributions of up to $2500 annually per account. Any earnings and distributions are tax-free when used for eligible college expenses.
For information about the College Savings Plans of Maryland, click here.
To read more about 529 Day, see this CBS news piece and this Wall St. Journal Market Watch piece.
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