College Graduates Earn 61% More

Lincoln, Neb.-  One of the smartest investments a parent can make is in their children’s education. A college graduate earns on average, an astounding 61% more than a high school graduate in a lifetime. Today, the rising costs of a college education continue to outpace inflation and without proper planning those costs can jeopardize a family’s ability to ensure their children have access to higher education. Still, the decision to save for college is often made too late.

Launched in 2001 to encourage parents and grandparents to save for their children’s college expenses, Nebraska’s College Savings Plan is one of the top in the nation. Utilizing this program is a practical choice, as well as a tax-savings advantage.

Under Section 529 of the Internal Revenue Code (the body which governs all state programs) there are three plans within Nebraska’s Educational Savings Plan Trust. They are: The College Savings Plan of Nebraska, The TD AMERITRADE 529 College Savings Plan, and The State Farm College Savings Plan. As Nebraska State Treasurer, I serve as the Program Trustee. Union Bank and Trust Co. serves as the Program Manager, and all investments are approved by the Nebraska Investment Council.

There are several tax advantages that go hand-in-hand with Nebraska’s College Savings Plan. Account owners may see up to a $5,000 in state tax deduction ($2,500 if married filing separately,) tax-deferred growth within their accounts, and tax-free withdrawals for a wide variety of education related expenses.

Investments can begin as low as $25 a month. This makes it possible for every family to have the opportunity to efficiently save for their children’s future. The plan is also highly flexible, as it utilizes well-known mutual fund families such as American Century, Fidelity, Goldman Sachs, PIMCO, State Street and Vanguard.

In my three years as Treasurer we’ve added 56,127 new accounts to the College Savings Plan, adding to the Plan’s overall total of 176,150. We’ve accomplished a 10.66% participation rate in Nebraska: one of the highest in the United States. This dramatic increase in participation despite the tough economic times proves that Nebraska families recognize a higher education is one of the most important things we can do for our children. It’s never too early to start planning for your child’s future. By investing early, you can make certain that your money will have sufficient time to grow.