LITTLE ROCK, Ark. (Sept. 18, 2012) - Gov. Mike Beebe has issued a proclamation designating September as "College Savings Month in Arkansas," joining many other states around the country in encouraging families to set aside funds to help their children pay for education beyond high school.
"As college costs continue to escalate, education is becoming a primary concern for parents all over Arkansas," says Martha Shoffner, Arkansas treasurer of state and chairwoman of the Arkansas Section 529 Plan Review Committee, which oversees the Arkansas College Savings Plans. "Our message to parents is to encourage a disciplined savings plan in order to increase their children's likelihood of success and to avoid overreliance on student loans. Early planning can pay big dividends when college approaches."
The Arkansas College Savings Plans, popularly known as 529 plans, are authorized under the Internal Revenue Service Code Section 529. These plans are designed to give families an opportunity to save for college with tax advantages. Parents, grandparents, friends, and others, can contribute to one of the two Arkansas 529 Plan accounts on behalf of the beneficiary.
Any Arkansas taxpayer can invest in the Arkansas College Savings Plans (which consist of the direct-sold Arkansas GIFT Plan and the advisor-sold Arkansas iShares 529 Plan) and deduct up to $5,000 for a person filing single or $10,000 for a married couple filing jointly from their 2010 state taxable income. Additionally, families who participate in the direct-sold Arkansas GIFT Plan and who qualify may apply for up to $500 a year in matching funds for up to five years through the Arkansas Aspiring Scholars Matching Grant Program (for details log onto www.arkansas529.org).
College Savings Month is a time for families all over Arkansas and nationwide to consider the value of higher education. It is vital for parents to realize how much a college degree can impact a child's life:
- Median family income in 2010 for families headed by a bachelor's degree holder or more was $99,716, more than double the median family income for families headed by the holder of a high school diploma.
- About 81% of youth with some of their own savings designated for school were certain they would attend and graduate from college, compared to 68% who had an account but no money specifically designated for future schooling and 64% of youth who did not have an account.
- Having savings over a period of years may raise a young person's educational expectations which may lead to increased academic efforts and achievement. *
- Youth who have school savings are almost four times more likely to attend a four-year college than youth with no account.
In addition, companies around the state are encouraged to consider offering their employees the option of direct deposit of contributions into an Arkansas College Savings Plan account as a voluntary benefit during the next open enrollment period. Payroll direct deposit lets employees save for higher education with every paycheck. This benefit can also make a company stand out from its competitors.
"Offering the GIFT Plan or the iShares Plan is a great opportunity for employees in Arkansas to save for their children, grandchildren, or even for their own career training," Shoffner stated, "especially with the option of direct payroll deposit, which is a free benefit. It's good for employees and good for their employers."
Treasurer Shoffner encourages families to observe College Savings Month by opening a 529 Plan account through the Arkansas College Savings Plans and start saving for their child's future education today.
For more information about the Arkansas GIFT Plan or Arkansas iShares 529 Plan, interested persons may go online to www.arkansas529.org or call the Arkansas College Savings Plans at the office of the Arkansas State Treasury toll-free at 1-855-686-2582.