ALBUQUERQUE, NM - From funding cuts to staff expansions, increased construction to facility maintenance, college costs are climbing to an all-time high. And the costs continue to increase year over year. The costs of higher education are rising at an annual growth rate of 7.1%, according to The Education Data Initiative. That leaves many students forgoing a college education or relying heavily on grants, loans, and scholarships–many of which are difficult to attain in the competitive pool of students.
As the saying goes, the best defense is a great offense. Planning ahead and saving early will help future college students navigate the ever-increasing costs associated with attending college or participating in an apprenticeship program. 529 Education Savings Plans are a great tool to ensure a student has access to higher education options.
“The cost of college continues to rise so it’s important to begin saving as early as possible,” said Natalie Cordova, Executive Director of Education Trust Board of New Mexico, the organization that administers The Education Plan®, 529 Education Savings Plan. “While costs continue to increase, financial aid has been decreasing. At The Education Plan, our goal is to help families prepare for and manage future education expenses and ease the huge burden of student loan debt. Saving with a 529 plan can assist families in financing a debt-free education.”
Funds in a tax-advantaged 529 Education Savings Plan can be used to pay for qualified expenses, including tuition, room and board, fees, and computer equipment at colleges, universities, trade or professional schools throughout the United States. A major advantage of investing in a 529 plan is its potential for tax-free compounded growth. Money in a 529 account grows tax-free and withdrawals are tax-free if the funds are used for qualified expenses. Several states also offer tax deductions for contributions into a 529 plan.
According to a 2021 CollegeBoard report, the cost for one year for a full-time student at an in-state public four-year university is $27,330–a price tag expected to increase at an average rate of 2.2% beyond inflation. Since 2011, annual college costs have increased 13% while available financial aid has decreased 18%, according to the CollegeBoard. Investing in a 529 plan can help offset that trend.
While starting early and contributing regularly into a 529 plan allows for more long-term growth, any contributions that fit your goals and budget will make a difference. Encouraging friends and family to contribute can also help grow the account.
To learn more about The Education Plan® or to begin saving today, visit TheEducationPlan.com.