Vol. 1, No. 1, Published May 6, 2015
50 Good Reasons to Start a ScholarShare Account on May 29
There are many good reasons to start saving for college.
On May 29 only, ScholarShare will offer 50 additional reasons: a $50 match to anyone who opens a 529 College Savings Account with a $50 deposit and establishes automatic contributions of $25 per month for a minimum of six months. To take advantage of this one-day offer, open an account on May 29 any time from 12:01 a.m. to 11:59 p.m. (PST).
The promotion, which falls on National 529 Day, aims to educate the public about ScholarShare, which is administered by the State Treasurer’s Office.
Since its launch in 1999, ScholarShare has grown to more than 260,000 accounts with more than $6.3 billion in total plan assets. More importantly, ScholarShare has helped families meet their higher education needs with nearly $300 million withdrawn by families in 2014 for qualified higher education expenses.
Named after Section 529 of the Internal Revenue Code that was created by Congress in 1996, 529 savings plans provide families with an investment tool that offers a diverse set of investment options, tax-deferred growth, and withdrawals free from state and federal taxes when used for qualified higher education expenses, such as tuition and fees, books, certain room and board costs, and other required supplies.
Concerned by the mounting financial strain placed on young professionals, states began as early as 1988 to develop innovative programs designed to help families and students save for their college education.
Today, 49 states and the District of Columbia offer Section 529 college savings plans and nearly 12 million families have saved more than $240 billion. Additionally, more than one million students nationwide have used these programs to help pay for their college education.
529 savings plans are more important than ever before. Over the past 40 years, college tuition rates have been consistently increasing at two to three times the rate of inflation each year. During this same period of time, federal financial aid funding has shifted away from student grants towards guaranteed student loans. Today, nearly 60 percent of all federal financial aid is in the form of loans, substantially increasing the number of college graduates faced with the burden of repaying enormous student loan debt upon entering the workforce.
Further, state support for public colleges and universities has fallen over the past decade, due primarily to the recent recession and budgetary shortfalls. As a result, public colleges and universities across the country are now receiving more funding from students in the form of tuition than direct support from states, according to a 2014 Government Accountability Office study.
Therefore, it is critical that we continue to raise awareness among California families of all income levels about the importance of saving for college and the significant role that 529 savings plans can play in that process.
Interested investors should consider investment objectives, risks, charges and expenses before investing in the ScholarShare College Savings Plan. Please visit www.ScholarShare.com or call 1-800-544-5248 for a Plan Disclosure Booklet with this and more information. Read it carefully. For details on the $50 match promotion, visit www.scholarshare.com/529day.