Many Florida families thinking about saving for future higher-education costs often find themselves in an uphill battle and confused. The news is filled with stories questioning the value of higher education, highlighting the recent increase in college tuition and bringing to light the nationwide student loan debt crisis.
All of these things are legitimate concerns for parents and the abundance of information is overwhelming. Here are a few facts for you to consider:
• Individuals with a bachelor’s degree earn an average of $20,000 a year more than high school graduates and earnings continue to increase with additional degree levels.
• Though Florida is still considered one of the most affordable states for in-state college tuition, state law permits tuition and fee increases of up to 15 percent at state universities until the national average is reached.
• Student loan debt exceeds $1 trillion in the United States — the highest in history. It is higher than credit card debt and auto loan debt with an average balance of $25,000. In addition, millions of student loans are delinquent three months or more. Burdened with the repayment of loans, many graduates are delaying adult rites of passage, including purchasing a home or starting a family.
As parents, we want the best for our children. Saving for their future education gives them the opportunity to be the best, and it is never too late or too early to start.
A dollar invested today is a dollar you or your child may not have to borrow in the future. You can help your child, and their future family, avoid being saddled with an abundance of student loan debt like many young adults today.
We must save for our children’s college education, and though it may seem intimidating, saving is simple and smart. Designed specifically to save for college, a 529 savings plan is simple and provides an affordable and flexible way to save.
Earnings, as well as qualified withdrawals, are free from federal income tax.
Funds can be used for a wide range of higher education expenses, such as tuition, fees, housing and textbooks for undergraduate or graduate studies at a variety of eligible education institutions throughout the country, including most public and private universities or colleges, as well as most technical schools.
Here in Florida, the Florida 529 Savings Plan offers 11 investment options to provide your family the flexibility to select a plan that helps you meet your savings goals and fits your budget.
You can an open account with a monthly contribution as low as $25 a month or an initial contribution of no less than $250.
On May 29, we will join states throughout the country to celebrate National 529 College Savings Day and help Floridians start a conversation about the value of a college education and savings goals.
To help encourage Floridians we are waiving the $50 application fee to open a Florida 529 Savings Plan account.
I urge you to begin saving now. The journey on the road to paying for college begins with the first step. No matter how much or how little — start today.
Kevin Thompson is executive director of the Florida Prepaid College Board.