September is College Savings Month. Let’s Make It Count!
Back in 2003, the U.S. Congress officially declared September College Savings Month, making a nationwide invitation to dream big for our children’s futures and take steps toward making those dreams a reality. It’s the perfect time to start planning for college costs so your child can chase their academic and life goals without being weighed down by overwhelming debt.
One of the smartest, most empowering steps you can take is opening and contributing to a 529 education savings account with The Education Plan®. It’s a tax-advantaged way to prepare for future education expenses — and it can make a real difference in reducing the need for student loans down the road.
How to Start Saving
Getting started is simple. You can start by creating a budget that puts aside a small amount each month for college savings. Treat it as a gift to your child’s future. Keep these funds separate from other savings by placing them in a dedicated 529 account. With The Education Plan, your contributions grow tax-free, and qualified withdrawals are tax-free too. Plus, if you’re a New Mexico resident, you can enjoy a 100% state income tax deduction on contributions — a rare benefit only four states currently offer!
You also don’t have to do it alone. Family and friends can join in by contributing through the Ugift program or even opening their own accounts for your child. Think about using special windfalls like tax refunds, work bonuses, or inheritances to give your account an extra boost. And remember, the earlier you start, the more time your money has to grow. Even if you begin when your child is in high school (or older), every dollar saved still reduces future debt. Encourage your child to add some of their birthday or graduation gift money to the account. They’ll thank you later!
How to Use Your Savings Wisely
When it’s time to withdraw funds, they can be used for a wide range of qualified education expenses, and that includes more than just tuition. Think room and board, textbooks, lab gear, online class materials, some study abroad programs, computers, and even necessary tech accessories like software, speakers, or a mouse, as long as they’re used primarily while your student is enrolled.
Some costs aren’t covered, like transportation, application fees, extracurricular activities, or most health insurance. And to make tax-free withdrawals, your student must be enrolled at least part-time. Non-qualified withdrawals come with taxes and a 10% penalty, so plan ahead.
Why It Matters
This September, commit to setting aside as much as you can toward this important milestone. Even small, consistent contributions can add up to something powerful over time. Give your loved ones the freedom to focus on their education, not their debt.
Back in 2003, the U.S. Congress officially declared September College Savings Month, making a nationwide invitation to dream big for our children’s futures and take steps toward making those dreams a reality. It’s the perfect time to start planning for college costs so your child can chase their academic and life goals without being weighed down by overwhelming debt.
One of the smartest, most empowering steps you can take is opening and contributing to a 529 education savings account with The Education Plan®. It’s a tax-advantaged way to prepare for future education expenses — and it can make a real difference in reducing the need for student loans down the road.
How to Start Saving
Getting started is simple. You can start by creating a budget that puts aside a small amount each month for college savings. Treat it as a gift to your child’s future. Keep these funds separate from other savings by placing them in a dedicated 529 account. With The Education Plan, your contributions grow tax-free, and qualified withdrawals are tax-free too. Plus, if you’re a New Mexico resident, you can enjoy a 100% state income tax deduction on contributions — a rare benefit only four states currently offer!
You also don’t have to do it alone. Family and friends can join in by contributing through the Ugift program or even opening their own accounts for your child. Think about using special windfalls like tax refunds, work bonuses, or inheritances to give your account an extra boost. And remember, the earlier you start, the more time your money has to grow. Even if you begin when your child is in high school (or older), every dollar saved still reduces future debt. Encourage your child to add some of their birthday or graduation gift money to the account. They’ll thank you later!
How to Use Your Savings Wisely
When it’s time to withdraw funds, they can be used for a wide range of qualified education expenses, and that includes more than just tuition. Think room and board, textbooks, lab gear, online class materials, some study abroad programs, computers, and even necessary tech accessories like software, speakers, or a mouse, as long as they’re used primarily while your student is enrolled.
Some costs aren’t covered, like transportation, application fees, extracurricular activities, or most health insurance. And to make tax-free withdrawals, your student must be enrolled at least part-time. Non-qualified withdrawals come with taxes and a 10% penalty, so plan ahead.
Why It Matters
This September, commit to setting aside as much as you can toward this important milestone. Even small, consistent contributions can add up to something powerful over time. Give your loved ones the freedom to focus on their education, not their debt.
Frequently Asked Questions
A 529 plan is a tax-advantaged investment account that is designed to grow savings for future education expenses for a specified beneficiary. 529 plans offer unique benefits and features that make them an appealing strategy for education related saving.
A 529 plan can be used for “qualified educational expenses.” For federal tax purposes, qualified educational expenses include:
- Tuition and fees at accredited higher education institutions
- Books
- Supplies and equipment
- Room and board for beneficiaries attending on at least a half-time basis.
- Computer technology, equipment, and internet access
- Up to $10,000 a year for K-12 tuition and expenses (Limit increase to $20,000 in 2026)
- Expenses for educational special needs services
- Transfers to an ABLE account for the beneficiary (transfer subject to annual limit)
- Apprenticeship expenses
- Up to $10,000 for student loan repayment
- Credentialing expenses and certification programs
- Roth IRA rollover for the beneficiary
If you're not sure if an expense is considered "qualified," we recommend consulting with a tax professional or advisor. Unqualified expenses will be treated like ordinary income: state and federal taxes will apply, with a 10% federal penalty for withdrawals from your 529 plan used to pay for them.
New Mexico residents can deduct contributions to The Education Plan from their state taxable income each year. This includes contributions made to an account that you are not the account owner of.
You cannot deduct contributions from federal income taxes.
Any person at least 18 years old with a valid Social Security Number (SSN) or Tax Identification Number (TIN) can open a 529 account. The account holder chooses the investment options, designates a beneficiary, and requests the distribution of funds.
The cost of college continues to rise, including tuition, housing, food and supplies, so it’s important to begin saving as soon as possible. You can learn more about how much a typical college education costs on our Cost of College page. It’s never too early or too late to start.
The Education Plan offers a variety of investment options to fit you and your family’s needs, risk tolerance and goals. You can see all of the available investment portfolios on the investments page.
Yes, you can use up to $20,000* a year to cover tuition and expenses for K-12 education.
Qualified K-12 expenses include:
- Tuition (public, private, and religious)
- Curriculum materials, books (including digital/online) and instructional materials
- Tutoring and instructional classes**
- Fees for a nationally standardized norm-referenced achievement test, an advanced placement examination, or any examinations related to college or university admission
- Dual enrollment program fees
Educational therapies for students with disabilities provided by a licensed or accredited practitioner or provider, including occupational, behavioral, physical, and speech-language therapies
*Starting in tax year 2026. The annual limit is $10,000 in tax year 2025 and permitted for tuition only.
**Tuition for tutoring or educational classes outside of the home, including at a tutoring facility, but only if the tutor or instructor is not related to the student and—
(i) is licensed as a teacher in any State,
(ii) has taught at an eligible educational institution,
or (iii) is a subject matter expert in the relevant subject.
You can open an account with The Education Plan online or by mailing in the enrollment form. In order to open an account, you will need the following information:
- Your social security number or TIN
- Your address
- Your bank account information (in order to fund the account)
- The beneficiary’s social security number or TIN
- The beneficiary’s birthday
-The beneficiary’s address
