Vermonters are part of the rising tide of enthusiasm nationwide
for "529" college investment programs (named after a provision in the
Internal Revenue Service code). Enrollment in Vermont's 529 plan, the
Vermont Higher Education Investment Plan, rose to 2,378 accounts in 2002,
an increase of 74.5 percent from 2001. Investments in the plan were valued
at more than $15 million at the close of 2002, compared with $8 million a
year before. The state's college investment vehicle has proven popular
with residents because of several key features:
* Earnings on withdrawals
used for qualified higher education expenses are free of federal and state
income tax.
* Students have flexibility to use the funds at nearly all
colleges in the United States and some abroad.
* The minimum required to
contribute is only $25 at a time or $15 per pay period by payroll
deduction.
* The maximum account balance per beneficiary is $240,100.
"The fourth quarter usually sees the heaviest volume of contributions to
college investment plans as people look to keep on track with their
financial planning," said Rich Westman of the , the program's sponsor. "However, we witnessed solid
growth in new accounts and contributions to existing accounts throughout
the year, indicating that families are trying to stay ahead of rising
higher education costs."
TIAA-CREF Tuition Financing, Inc., part of
TIAA-CREF, manages the program. The organization is the largest manager of
state-sponsored college investment programs, working with 13 states.
For more information about the Vermont plan, call 1-800-637-5860 or visit
www.vsac.org. If you are not a Vermont resident, or if you have taxable
income in another state, consider whether the other state offers a 529
plan with favorable state income tax or other benefits not available if
you invest in the Vermont plan. The plan Disclosure Booklet should be read
carefully before opening an account. The State of Vermont, VSAC, TIAA-CREF
Tuition Financing, Inc., Teachers Insurance and Annuity Association of
America and its affiliates do not insure any account or guarantee its
principal or investment return. Account values will fluctuate based upon a
number of factors, including general financial market conditions.
Investments are made through Teachers Personal Investors Services, Inc.,
as distributor.
*The law allowing federal tax-free qualified withdrawals is set to expire
on December 31, 2010. Congress may or may not extend the law.
State's Higher Education Investment Plan Has Banner Year
Submitted by tim
on