Overall, findings from the mid-year 529 Report indicate that millions of American families continue to invest in higher education for their children, and see 529 plans as a good choice for for their investments." -- Joan Marshall, Chair of CSPN
Lexington, Ky. (PRWEB) September 29, 2011
The College Savings Plans Network (CSPN), the nation’s authority on 529 College Savings Plans, announced that American families’ total investments in 529 plans reached a record high of $169.71 billion in the 12-month period ending June 30, 2011, according to its mid-year 529 Report released today. The report is based on data aggregated exclusively by CSPN from all 529 plans in the country, including 107 savings and prepaid tuition programs, and examines 529 plan assets, contributions and distributions from July 1, 2010 to June 30, 2011. The report shows that saving for college is still a priority for American families, with nearly half (46 percent) of all 529 plan accounts receiving contributions during the first half of 2011.
“The exclusive and unbiased data released in today’s report found that the average 529 plan account balance increased 26 percent between July 1, 2010 and June 30, 2011 to $16,959,” said Joan Marshall, Chair of CSPN and Executive Director of the College Savings Plans of Maryland. “On average, these savings will cover one year of tuition and fees, room and board, at a public four-year university in the United States. Although this is only a quarter – or less – of the cost of a public higher education, it’s important to remember that any money saved for college is money that a family will not have to take out as loans and repay with interest. If a family did not have these funds in a 529 account and instead needed to borrow $16,959 to pay for college expenses, it would cost them approximately $24,691 to repay a loan at eight percent interest over 10 years.”
Highlights of the 529 Mid-Year Report:
Contributions to new and existing accounts nationwide exceeded $19.5 billion since July 2010. Nearly half (46 percent) of all 529 accounts received a contribution in the first half of 2011, and approximately 1 million (10 percent) 529 accounts took a distribution.
Total assets in 529 plans increased to a record high of $169.71 billion, a 25.6 percent increase for the time period July 1, 2010, to June 30, 2011. Assets under management in 529 plans increased 18.5 percent net of contributions and distributions from the plans, as compared with a 27.9 percent increase reported for the S&P 500 and a 3.9 percent increase reported for the Barclays Capital Aggregate Bond Index. “The returns of individual investment options in 529 plans vary due to the account holder’s ability to invest in a variety of strategies including fixed income, equities, guaranteed return or a blend of these,” said Marshall. “A majority of individual options offered positive returns during the period.”
The mid-year 529 Report is based on data aggregated from all 107 Section 529 savings and prepaid tuition programs from July 1, 2010 to June 30, 2011. Data is collected by CSPN twice a year to provide consumers and financial advisors with the most timely, complete, and accurate information available on 529 plans.
“Overall, findings from the mid-year 529 Report indicate that millions of American families continue to invest in higher education for their children, and see 529 plans as a good choice for their investments,” said Marshall. “Plans are offered in nearly every state, and 34 states and the District of Columbia offer state tax deductions or credits for contributing to certain 529 plans, in addition to the federal tax benefits. However, most of these states require investors to contribute before the end of the year in order to reap a state tax deduction or credit for the current tax year. As the end of 2011 approaches, I encourage investors to consider opening or contributing to a 529 plan to take advantage of year-end state tax savings opportunities available.”
Currently, 49 states and the District of Columbia offer 529 plans. For more information on the CSPN mid-year 529 Report, plus resources and tools families can use to make informed decisions about saving for college, visit http://www.CollegeSavings.org.
About College Savings Plans Network (CSPN)
College Savings Plans Network(CSPN) is the only unbiased source for information on Section 529 College Savings Plans, one of the most popular, convenient and tax-advantaged ways to save for college. CSPN is a not-for-profit association affiliated with the National Association of State Treasurers (NAST) that brings together state administrators of 529 savings and prepaid plans as well as their private sector partners. Information that families of all income levels can use to make informed saving decisions is available on CSPN’s website, http://www.CollegeSavings.org.