Five two nine college savings plans popular in so many ways with the public, and the size of these plans show it. The costs of college just keeps climbing, so it never too early to start planning for how you will pay for it. And if you think your highly gifted student athlete or academic prodigy will win a full ride so you don’t have to save, you should know that the odds are not in your favor. Sure, there is a lot of private and school funded aid, but it’s stretched among so many students that it’s not enough for most families. Five two nine college savings plans popular amount families for just that reason.
The 2019-2020 Free Application for Federal Student Aid is now available, allowing students and their parents to fill out the form they hope will lead to money to pay for college. But in most cases, the aid won’t come close to covering the cost of four years of tuition, fees, room and board. While it’s definitely still worth it to submit the FAFSA form, families have to do more. They’ve got to save if they want to eliminate or greatly reduce reliance on student loans. Just take the magnitude of this number : $1.53 trillion dollars.
That’s how much there was in outstanding student loans for the second quarter of 2018, according to the Federal Reserve. Compare this with the $487 billion in student debt during the same period in 2006. Parents and students are using the five two nine plans to offset costs associated with funding college. Under a five two nine plan, earnings are not subject to federal tax–and generally state tax–if they are used for such qualified education expenses as tuition, fees, books, and room and board.
More families are saving in five two nine plans. Two years ago, the most popular way to save for college was a regular savings account, according to a survey by T. Rowe Price. Now 44 percent of parents surveyed by the financial company said they are suing a five two nine account in 2018, moving it to the top way to save for college. Total investments in this savings vehicle reached a record $328.9 billion in the first six months of 2018, according to the nonprofit College Savings Plans Network. The average account balance hit a record high of $24,153.