On May 29, South Carolina will join college savings programs all over the country to celebrate 529 Day, a day set aside to enhance awareness of college savings plans designated as 529 plans. A 529 plan is an investment account that helps investors save for college much like a 401 (k) account helps investors save for retirement.
For the second year in a row, the Office of State Treasurer will be celebrating 529 Day with the privately funded PalmettoBaby grant program. All babies born in South Carolina on May 29, 2014 will be eligible for a $529 college savings grant for an existing account or when their parent or guardian opens a new Future Scholar 529 account. It’s an easy way to jumpstart college savings for these new babies and celebrate Future Scholar. It’s also the perfect chance for you to begin saving for your child’s brilliant future.
There is no doubt that the opportunity to obtain a college education is one of the best gifts you can give your child, grandchild, friend, niece or nephew. It is especially important now, as college costs continue to rise. The College Board reports over the last five years, the national cumulative increase in tuition and fees for a four-year public university has been 27%. Rising costs can leave students mired in debt. In fact, according to research, the average debt incurred by a college graduate in South Carolina in 2012 was a whopping $27,416.
Such a large debt burden is difficult to overcome. The best solution to the problem of rising college costs is opening a Future Scholar 529 College Savings account now. South Carolina’s Future Scholar 529 plan, administered by the Office of State Treasurer, offers opportunities for tax deductible contributions, tax-deferred growth and tax-free distributions for qualified education-based purposes. Students aren’t required to attend college in South Carolina, and there’s no minimum amount necessary to open an account.
Investors in Future Scholar can be proud of the decision to save with SC’s 529 plan. In 2012, the Office of State Treasurer re-negotiated the plan’s management contract. The new contract expanded investment options, created a marketing campaign that uses no state funds, and reduced the management fees.
The Wall Street Journal recognized South Carolina’s Future Scholar plan as having the highest state tax deduction of any 529 plan in the country. Money Magazine highlighted Future Scholar as a leader in low fees and praised the contract re-negotiation, saying, “South Carolina eliminated program management fees and dropped investment expenses for in-state residents,” and Savingforcollege.com, an organization that evaluates 529 plans, gave South Carolina’s Future Scholar plan its highest rating of five CAPS.
South Carolina families have gotten the message, making Future Scholar a great success. Families opened more than 14,000 new accounts last year alone, a 35% increase over 2012 and an incredible 46% over 2010’s figures. Future Scholar account holders also increased their investment dollars in the plan in 2013 by 26% over 2012 and by 44% over 2010. That kind of commitment to education is great news because every child who achieves his or her potential gives South Carolina a brighter future for all of us to enjoy, and that’s the best reason to celebrate.
We’re proud to highlight Future Scholar college savings in South Carolina on May 29. You can visit www.futurescholar.com to open your own Future Scholar 529 college savings account just in time for 529 Day.
Curtis M. Loftis Jr. is the S.C. State Treasurer