Only 3% of U.S. families use college savings plans

Wow. The Government Accounting Office has just released the a study showing that only 3 percent of American families are using these accounts to save for their children’s college expenses. And participating families are disproportionately wealthy.  The GAO reports: “Families with these accounts had about 25 times the median financial assets of those without. They also had about 3 times the median income and the percentage who had college degrees was about twice as high as for families without 529 plans.”

No wonder the average recent college grad’s student loant debt is now nearly $25,000 and student debt in the naiton is larger than credit card debt. Families–including working high school students—should be participating in a college savings program, especially when contributions are tax-exempt. 

All states have some kind of plan. For Georgians,  TIAA-CREF runs the Path2College 529 plan.  Contributions of up to $2,000 per child are excempt from state income taxes–in Georgia, can amounts to a 6 percent return without even factoring in the earnings and tax savings over the life of the fund. You may also contribute while your child is in college.

If you have children and plan to send them to college, check it out.

 

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