529 Education Savings Plans Can Help Families Save Wisely and Consistently Amidst Rising Education Costs

Santa Fe, NM, Feb. 12, 2025 (GLOBE NEWSWIRE) — Education is a pathway to success—a pathway that often requires a funding strategy from families and students. Proactive savings through a 529 education savings plan is one way to help pave a path forward and confidently position you and your loved ones for the future.

Tuition fees typically represent the largest cost of higher education and are often the first consideration for families. In terms of tuition only, the average cost at any four-year institution is nearly $18,000, according to the Education Data Initiative. That figure shows a significant increase of more than 25% over the past decade.

But while tuition accounts for the largest share of education expenses, additional costs associated with higher education include other expenses like books and materials, room and board, travel, meals and various personal expenses. The Education Data Initiative estimates the average total cost of attendance for a student living on campus at an in-state public 4-year institution surpasses $108,000 over 4 years.

As college costs and related expenses can amount to a significant cost, 529 education savings plans offer a comprehensive solution to reduce or avoid the burden of student loans. While education expenses are significant, smart saving can prepare families. A 529 plan is a tax-advantaged opportunity to start saving as early as possible while allowing friends and family to pitch in.

Not only can parents add to a student’s 529 plan, but friends and other relatives can also make gift contributions to a loved one’s 529 account through a one-time gift or a recurring contribution. Friends and family who make gift contributions may also qualify for tax incentives and their contributions can help grow savings to offset the growing costs of higher education.        

529 funds can be used to pay for education expenses at universities, colleges, trade schools, and professional schools. 529 plans offer flexibility, allowing funds to be used for a variety of qualified expenses including tuition, room and board, books, fees and computer equipment at eligible educational institutions nationwide. Funds may also be used to pay for K-12 tuition, apprenticeship expenses, and more.  

The Education PlanⓇ is a 529 education savings plan sponsored by the State of New Mexico and administered by the New Mexico Education Trust Board. The tax-advantaged savings plan is intended to help make future education more affordable for families.

The Education Plan offers flexible contribution options to make it easy for families to save. An account can be opened with no minimum initial contribution required and contributions can be made at any time through a one-time gift or regular automatic contributions. Contributing regular amounts consistently over time is one effective strategy for building tax-advantaged education savings. 

Contributions invested in a 529 plan grow tax free and withdrawals are tax-free when used for qualified expenses. Additionally, many states, including New Mexico, offer state tax deductions or credits for contributions to 529 plans, providing further financial incentive for families to invest in their children’s education.

For more information about The Education PlanⓇ, visit www.TheEducationPlan.com.

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