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Program
helps save for college
By
Amy Geiszler-Jones
With
as little as $25 a month, you can begin saving for a college education
for your child or even yourself though Learning Quest, Kansas’
education savings program.
State
treasurer Tim Shallenburger, who created the program, and Janet
Ink, from the investment firm American Century that is managing
the program, were on campus last week to share details about the
program.
Created
in 1999, the Learning Quest program has been rated as one of the
top five 529 college savings programs in the nation by Kiplinger’s,
Shallenburger said. The 529 refers to the tax code section that
created college savings programs with tax incentives in the mid-1990s.
Although created by the state of Kansas, the program is open to
anyone in the United States who wants to invest in such a plan.
Some
recent tax code changes have made the program even more attractive
to those wanting to invest in a college education.
For
Kansas residents, it takes only a monthly investment of $25 or a
lump sum of $500 to open an account. Non-Kansans have higher requirements.
As a WSU employee, your monthly investment can be payroll deducted.
When
you open an account, you name a beneficiary, whether that’s
a child, a friend, a relative or even yourself. An account holder
can switch the beneficiary, too.
Because
of that flexibility, there’s really no maximum age for when
someone should start saving for college, Ink said. A beneficiary
can range from an infant to an adult planning to return to school
or someone going on to graduate school.
You
use the account to pay tuition, fees, books, required supplies and
equipment and room and board charges at any accredited school, including
private and public institutions, community colleges, or technical
and vocational schools. You’ll need to wait 24 months to make
a qualified withdrawal. If you make a withdrawal sooner or for expenses
that don’t qualify, you’ll pay a penalty charge.
As
an investor, you are able to choose aggressive, moderate or conservative
investment tracks, Ink said. You can switch portfolio tracks once
a year.
Besides
helping people save for college, the program offers some tax benefits.
If you pay Kansas income taxes, you can reduce your state adjusted
gross income by the amount you contribute for each student, to a
maximum of $2,000 per student each year or $4,000 if you are married
and file jointly. The earnings on the account grow tax-deferred,
and no federal or state taxes will be due on withdrawals for qualified
education expenses.
Kansas
residents pay a $10 annual account maintenance fee, the minimum
amount required by federal law, while out-of-state residents pay
$40.
As
of late September, the Learning Quest program had 14,000 account
holders and was worth $73 million, Shallenburger said. It lost $1
million in the markets during the week of Sept. 17-21.
To
find out more about the program or to request an enrollment kit
(a payroll deduction form is included), call 1-800-579-2203 or go
online to www.learningquestsavings.com.
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