The state treasurer is touting the use of 529 plans, like College Savings Iowa, as a way for relatives to help save for their loved ones’ future higher education expenses.
Michael Fitzgerald says the plan offers a great way for students’ families to help them prepare for college. “Parents or grandparents can put up to $3,319 into an account for a student, deducted it from their Iowa taxes, and it will be professionally invested, and it will grow tax-free,” Fitzgerald says, “and students can go wherever they want to go to college.”
While “529 College Savings Day” will be celebrated on May 29th, Fitzgerald is using the whole month to promote the program, encouraging people to head to the College Savings Iowa website to learn more. “We encourage people to head to Iowa529Contest.com and we have a three-minute video there,” Fitzgerald says. “It just shows how simple it is and how great it is, and you are automatically enrolled for a drawing. We’re going to give away a $529 scholarship this month. All you have to do is look at that video and you are automatically signed up.”
Fitzgerald says the program offers families a tax-advantaged way to save money for their children’s higher education, which he says he does for his grandchildren on a regular basis. “I can deduct that right from my Iowa income taxes, not your federal but you can deduct it from your Iowa income taxes and then I get to choose 14 different options, Vanguard mutual funds, so it’s professionally managed, and it will grow tax-free,” he says. “The federal government won’t tax it. The state government won’t tax it. And you can go to any school in the United States you want to go to.”
Speaking in Mason City, Fitzgerald says the program can help address the skilled worker shortage in the state as children can also choose to use the money to go to a trade school. “You want to learn how to be a good welder, make a great income, it’s still going to cost you to go to an area school, a couple thousand dollars,” he says. “This can also pay for room and board, so if you are living 50 miles away from someplace like NIACC, you’re probably going to have to get an apartment up here. You can use that money for room, board, tuition, and things like that.”
Learn more at Collegesavingsiowa.com or call 888-672-9116.
(By Bob Fisher, KRIB, Mason City)