Discover the True Cost of College

There’s more to it than just tuition.

Saving for college starts with understanding the true cost of a post‐secondary education. College expenses grow every year and include more than just tuition. Over the last 10 years, published in‐state tuition and fees at public four‐year universities increased at an average rate of 2.2% beyond inflation, according to the College Board.

Scroll down to see the national averages for one year at an in‐state public university in 2021‐2022.
 

The Cost of One Year of College

There’s More To It Than Tuition

Tuition

 

$10740

Room and Board

 

$11950

Books and supplies

 

$1240

Transportation*

 

$1230

Other Expenses

 

$2170

Total

$27,330

 

This is the average total cost of college for a full‐time, in‐state student at a public four‐year university.
 

*Please note, transportation and travel costs are not qualified expenses for 529 plans, they 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.

*Source: 2021 CollegeBoard Trends in College Pricing

Grants, loans and scholarships are harder to come by.
While costs continue to increase, financial aid has been decreasing.

Since 2010, annual college costs have increased 15% while available financial aid has decreased 12%.

Source: Trends in College Pricing and Student Aid 2021, College Board, 2021

*Source: Trends in College Pricing and Student Aid 2021, College Board, 2021

Grants, loans and scholarships are harder to come by.
While costs continue to increase, financial aid has been decreasing.

 

Since 2010, annual college costs have increased 15% while available financial aid has decreased 12%.

Created with Highcharts 9.3.2Annual College CostsFinancial Aid21320219518918719 04019 96020 39021 48021 950Financial Aid ($B)Annual College Costs ($)2010-20112012-20132014-20152016-20172018-201918 50019 00019 50020 00020 50021 00021 50022 000050100150200250
  1. Sources:
  2. Trends in College Pricing 2019, CollegeBoard, 2019
  3. Trends in Student Aid 2019, CollegeBoard, 2019

Your Savings Can Grow Faster
Learn about the compounding effect of 529 tax benefits.

 

Taxable savings account vs. 529 savings

Two different families open savings accounts with an initial deposit of $1,000 and opt for monthly contributions of $150. Both families save for 18 years, earning 7% on their investment.

The 529 plan earned over $10,000 more over 18 years than the taxable savings account.

These hypothetical examples are for illustrative use only and do not reflect an actual investment in any specific 529 plan. Families are assumed to be in the 24% tax bracket during contribution and distribution. The hypothetical examples assume a monthly contribution of $150, return on investment of 7% and no withdrawals during the 18 years. Actual returns may vary.
Created with Highcharts 9.3.2$12680$12680$29946$29946$53458$53458$13359$13359$33407$33407$63495$63495Taxable savings account529 savingsGrowth over 6 yearsGrowth over 12 yearsGrowth over 18 years020k40k60k80k

Understanding the 529 Tax Landscape State by State

Get the most out of your state tax benefits.

New Mexico

Home of The Education Plan

Tax parity*

These states offer tax deductions or credit for contributions to any 529 plan, regardless of state.

*Please Note: State tax benefits in tax parity states apply to contributions in any 529 plan.

Tax neutral

These states do not offer tax deductions or credit for 529 contributions, or have no state income tax.

In-state tax benefit

These states offer tax deductions or credit for contributions to the
in-state 529 plan only.

The Benefits of Starting Early

No matter your educational path, 529s can help with the journey.
Planning ahead is the key.

 
Tips for Maximizing Your 529 Account
Start EarlyConsider contributing once your child is born rather than when they’re already at school age.
Make it a family affairGet help from friends and family to ensure you’re meeting education milestones. It’s an excellent legacy planning opportunity.
Consider higher contributionsMaximizing your contributions can ensure that you have enough to fund any educational needs.
Ensure your investment strategy is alignedChoose an age-based solution or a custom investment solution based on your needs.

Don’t let the sticker price scare you. Most students will receive grants and other benefits to help pay the bill. The remainder can be covered with traditional savings, student loans or a 529 account, which has significant tax benefits and can be opened with as little as $1.

Research has shown that children with savings of just $500 are three times more likely to attend and four times more likely to graduate college. You got this. Get started today.

What Financial Aid Typically Covers

Grants, loans and scholarships are harder to come by.
While costs continue to increase, financial aid has been decreasing.

Between 2010-2011 and 2020-2021, average total financial aid per undergraduate student decreased by 8%. 

Total Undergraduate Student Aid in 2020 Dollars by Source and Type (in Billions), 2000-01 to 2020-21

Source: https://research.collegeboard.org/pdf/trends-college-pricing-student-aid-2021.pdf

The Tax Benefits of Saving Early

Your Savings Can Grow Faster
Learn about the compounding effect of 529 tax benefits.

Taxable savings account vs. 529 savings
Two different families open savings accounts with an initial deposit of $1,000 and opt for monthly contributions of $150. Both families save for 18 years, earning 7% on their investment.

The 529 plan earned over $10,000 more over 18 years than the taxable savings account.

These hypothetical examples are for illustrative use only and do not reflect an actual investment in any specific 529 plan. Families are assumed to be in the 24% tax bracket during contribution and distribution. The hypothetical examples assume a monthly contribution of $150, return on investment of 7% and no withdrawals during the 18 years. Actual returns may vary.
 

Understanding the tax landscape
Get the most out of your state tax benefits.

Updated as of 11/23/2020
New Mexico

Home of The Education Plan

Tax parity

These states offer tax deductions or credit for contributions to any 529 plan, regardless of state.

Tax neutral

These states do not offer tax deductions or credit for 529 contributions, or have no state income tax.

In‐state tax benefit

These states offer tax deductions or credit for contributions to the
in‐state 529 plan only.

Created with Highcharts 9.3.2MassachusettsMassachusettsWashingtonWashingtonCaliforniaCaliforniaOregonOregonWisconsinWisconsinMaineMaineMichiganMichiganNevadaNevadaNew MexicoNew MexicoColoradoColoradoWyomingWyomingKansasKansasNebraskaNebraskaOklahomaOklahomaMissouriMissouriIllinoisIllinoisIndianaIndianaVermontVermontArizonaArizonaArkansasArkansasTexasTexasRhode IslandRhode IslandAlabamaAlabamaGeorgiaGeorgiaMississippiMississippiSouth CarolinaSouth CarolinaNorth CarolinaNorth CarolinaVirginiaVirginiaIowaIowaMarylandMarylandDelawareDelawareNew JerseyNew JerseyPennsylvaniaPennsylvaniaNew YorkNew YorkIdahoIdahoSouth DakotaSouth DakotaConnecticutConnecticutNew HampshireNew HampshireKentuckyKentuckyOhioOhioTennesseeTennesseeWest VirginiaWest VirginiaDistrict of ColumbiaDistrict of ColumbiaLouisianaLouisianaFloridaFloridaMinnesotaMinnesotaMontanaMontanaNorth DakotaNorth DakotaUtahUtahHawaiiHawaiiAlaskaAlaskaCaliforniaProvides no state tax benefits or has no state income tax

Tax Benefits by State by State

In-State Tax Benefit

These states offer tax deductions or credit for contributions to the in-state 529 plan only.

New Mexico

Home of The Education Plan

Tax Parity

These states offer tax deductions or credit for contributions to any 529 plan, regardless of state.

*Please Note: State tax benefits in tax parity states apply to contributions in any 529 plan.

Tax Neutral

These states do not offer tax deductions or credit for 529 contributions, or have no state income tax.

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For more information about The Education Plan, call 1.877.337.5268 or view the Plan Description and Participation Agreement, which includes investment objectives, risks, charges, expenses, and other important information; read and consider it carefully before investing.

Please Note: Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program. You also should consult a financial, tax, or other advisor to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. You also may wish to contact directly your home state’s 529 plan(s), or any other 529 plan, to learn more about those plan’s features, benefits and limitations. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision.

The Education Plan is administered by The Education Trust Board of New Mexico. Ascensus College Savings Recordkeeping Services, LLC, the Program Manager, and its affiliates, have overall responsibility for the day-today operations, including investment advisory, recordkeeping and administrative services. The Education Plan’s portfolios invest in: (i) mutual funds; (ii) exchange traded funds; and/or (iii) a funding agreement issued by New York Life. Investments in The Education Plan are not insured by the FDIC. Units of the portfolios are municipal securities and the value of units will vary with market conditions.

Investment returns will vary depending upon the performance of the portfolios you choose. You could lose all or a portion of your money by investing in The Education Plan depending on market conditions. Account owners assume all investment risks as well as responsibility for any federal and state tax consequences.

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The Education Plan® and The Education Plan® Logo are registered trademarks of The Education Trust Board of New Mexico used under license.

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