State treasurer Mike Fitzgerald says a state-sponsored college savings fund has grown to $3.5 billion, as parents and grandparents save for college for their children and grandchildren.
At a budget hearing this month, Fitzgerald provided an update on the College Savings Iowa program to Governor Terry Branstad, who has invested in the fund himself. “It’s a thing I wanted to do for my grandchildren,” Branstad said.
Contributions are deductible for state taxes and the interest grows tax free. Branstad said, so far, he’s put more than $18,000 dollars into his grandkids’ accounts. “It’s getting kind of expensive with five grandchildren, soon to be six. We’re going to have the sixth one in December,” Branstad said. Marcus Branstad and his wife Nicole are expecting a baby boy.
Fitzgerald reminded the governor, for tax purposes, he should open the account right away. “If the baby comes in December, you can start one for him and get this year’s tax deduction. The deadline is December 31 at midnight,” Fitzgerald said. Branstad responded, with a laugh: “I’m keenly aware of that.”
The College Savings Iowa program has been growing in popularity since its initiation back in 1998. Currently, there are active accounts for nearly a quarter-of-a-million young people. Participants deduct contributions from their state taxes for up to $3,000 dollars. A parent or grandparent can open an account for as little as $25.