DES MOINES, Iowa – College Savings Iowa opens contest to celebrate the benefits to having an account.
College Savings Iowa 529 Plan is a savings account you can open to help pay for education expenses. It costs $25 to open an account. People can write off up to $3,387 per beneficiary on tax deductibles each year.
People can enter children under the age of 18 for a drawing to be eligible to win $529 to put into their Iowa College Savings plan.
The program started two decades ago in Iowa with only a few thousand accounts. Now there are more than 260,000 accounts.
State Treasurer Michael L. Fitzgerald said on average there is about $19,650 in an account.
“It’s to help the family to send their kids to college cause it is getting so expensive. You could go to a trade school. We just want to help you train the next generation,” Fitzgerald said.
The money saved in a college savings plan can go towards paying for higher education like a state school, university, private college, community college and trade school.
“Trade schools, you want to go to barber college, you want to become an electrician or carpenter those are all meaningful jobs but need training. Everything needs training and our program is set up to help families. We don’t want to tell you where to go to school, what profession to go to or be involved with. We just want to help you out financially,” Fitzgerald said.
People can use the money saved to pay for college tuition, supplies and housing.
In 2018, a law was passed to allow the money saved to go towards paying for K-12 school. However, the money can only be used for tuition.
Fitzgerald said there is a point two percent fee to have an account. “What we call 20 basis points. That’s one fifth of one percent. It’s almost free, but there is a little cost that pays for how we operate the program.”
If a student wishes to withdraw the money at 18 and not go to college they will pay a 10 percent of the interest earned.
Every state except Wyoming has some form of a College Savings plan.
The last day to sign up for the contest is May 31st. To learn how to register click here.