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College Savings Month: Tips on utilizing Idaho's 529 savings plan

Idaho offers support for residents looking to save for higher education, a special investment account can be opened years ahead of heading off to school.

BOISE, Idaho — Preparing for college can be a challenge financially. Headlines these days highlight the debt some students go into to get a degree. It is a headline that might push students away from purposing higher education, but did you know the State of Idaho has an education program to help families achieve their education goals?

“We help families save for education in a tax advantaged way,” Executive Director of Ideal, the Idaho College Savings Program, Christie Stoll said.

The Idaho College Savings Program works with Idaho families to setup 529 plans, a special education savings plan designed to help Idaho families. It is technically an investment account that can grow contributions toward higher education.

“Absolutely, it's a big goal, right? It's a big goal for the future and so it's really nice that all states have a 529 and we're here to help families save for that really big goal," Stoll said. "One of the things I always like to tell people is you don't have to do it on your own."

529 plans in Idaho can start up with a simple $25 investment, with monthly or quarterly contributions the plans grow on their own.

“You would be so surprised at $25 on a regular basis. Saving could really do for your savings in the future. So, I would hope that folks would not give up their big dreams,” Stoll said.

There are also major tax benefits when you start a 529 plan. Those include tax-deferred earnings and tax-free withdrawals for qualified expenses. There is also a state income tax deduction for Idaho taxpayers of up to $6,000 per individual filer, or $12,000 for a married couple filing jointly. Stoll said the mentality of just starting a plan can be really helpful.

“It's a big boost. It's a big, I'm going to go. It's not if, it's when and where,” Stoll said.

So, how do you get started and when? Stoll said a huge message to families concerned about higher education; it is never too early to start saving for your students.

“Just start, you'll be surprised and it will be a habit. You won't miss the money and it will start growing," Stoll said. "So, the money has potential to grow. When it goes into your account, you choose your investments, has the potential to grow and then when you take the money out, there is no taxes on any of the growth you have."

In the context of student loans, sometimes that is just the reality of a situation. However, Stoll said these programs can help address that.

“We also hope to help families mitigate their student loans. So, any money you save now is money that you don't have to pay back in the future,” Stoll said.

So, what education endeavors are eligible? Is the program limited to one education route? Stoll said no, this is about saving for whatever education option best fits for a family.

“Apprenticeships, it could be for all sorts of trade schools and that sort of thing. So, we help families save for whatever their future education dreams are,” Stoll said.  

Again, the key to minimizing cost and loans when it’s time for a student to move on is saving, saving that can start before a student is even born.

“Every dollar now saved to last, you're going to have to pay back potentially with interest. If you take a student loan,” Stoll said.

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