Whether you’ve got kids, grandkids, or some other important young people in your life, school has probably crossed your mind in the past few weeks. Preschoolers, elementary, middle, and high school kids are back to hitting the books. And so are college students. According to the South Carolina Commission on Higher Education, more than 200,000 South Carolinians are enrolled across South Carolina’s 60 post-secondary institutions! As all of these students pack up their book bags and head to class, educational and financial institutions across the US ask people to think about the importance of saving for college with their annual celebration of College Savings Month. In South Carolina, this is a time to talk about the benefits of Future Scholar, South Carolina’s 529 plan.
September is College Savings Month!
Every September, educational and financial institutions–including state 529 plans–help spread the word about the importance of saving for higher education. South Carolina’s 529 college savings plan is called Future Scholar and, according to State Treasurer Curtis Loftis, it is one of the best college savings resources in the country.
Loftis explains “College Savings Month provides us an opportunity to encourage families to save for a child’s future education. I want South Carolina families to know that we have worked to make sure Future Scholar is not only one of the finest 529 college savings plans in the nation, but also one of the easiest to use. There’s no minimum amount needed to open an account and no minimum contribution required. It’s simple to set a savings goal and choose which investment option will help you meet that goal. I hope families will make September the month they begin to save for their child’s successful future.”
What is Future Scholar?
Future Scholar is South Carolina’s 529 College Savings Plan. A 529 plan is an investment account specifically for college savings. It works like a 401(k), the money that goes in is tax-deductible, and the interest it earns is tax-free, as long as you use the money for approved expenses. Approved expenses include tuition and fees at eligible institutions; room and board; and books, supplies, and equipment.
Every state has a 529 plan, but they all differ slightly in how they’re managed, and the benefits they carry. South Carolina’s plan, Future Scholar, has been recognized as one of the best nationwide for its low fees, and its tax advantages, which are the best available for South Carolinians.
Why open a Future Scholar account now?
The cost of college has risen dramatically over the past decade – much faster than the rate of inflation. College is much more expensive for students and families nowadays than a generation ago. While rising costs can be intimidating and even if families can’t save enough to cover 100% of their higher education costs, every dollar saved is one you or your child may not have to borrow. Whether you’re saving $1000 a month or putting in $50 here and there, when you have extra money in your budget, you’re adding to your child’s investment. Every dollar helps, every contribution counts.
There are also other financial incentives to opening a Future Scholar account. Contributions are fully deductible on your state income tax returns. Plus, any interest earnings are tax-free from both state and federal taxes, when used for qualified education expenses.
Who is a Future Scholar 529 account for?
Anyone can open and/or contribute to a Future Scholar account. This means that parents, grandparents, aunts, uncles, and friends can make contributions and receive the same tax benefits as the account owner. Future Scholar also makes gift-giving super easy. Their e-gift program allows you to invite anyone to make gift contributions via a simple link.
And whatever postsecondary destination a student chooses, their savings can go with them. 529 funds can be used at any accredited school in the US and over 600 schools internationally. The type of institution that money goes toward can be a 4-year college or university, community college and technical schools, apprenticeships, and even graduate schools.
Because life sometimes causes a change in plans, Future Scholar provides the flexibility to transfer funds to another beneficiary if needed. For example, the funds in a 529 plan can be transferred to a sibling, or even to yourself or retained for a future grandchild. If a child earns a scholarship, the funds can be used to cover items not covered by the scholarship (like the books, supplies and equipment mentioned earlier), or you can withdraw funds up to the amount of the scholarship without incurring a penalty. You’ll only owe taxes on the earnings portion of the investment.
Getting Started is Easy
Opening a Future Scholar account is really easy to do. You do not need to be a financial expert or have access to one! It takes less than an hour to enroll and you can do it anytime. Simply go to the Future Scholar enrollment page. The only information you will need to collect beforehand is your personal information and that of the beneficiary (name, address, social security number, and date of birth) plus the banking information you want to use for your first contribution.
You can learn more about Future Scholar by:
- Watching this Facebook Live Q&A Kidding Around’s Bethany had with State Treasurer Curtis Loftis
- Visiting the Future Scholar web site;
- Calling 888.244.5674 Monday through Friday between 8 am & 7 pm; and/or
- Asking a question on the Future Scholar contact page.
Have you opened a College Savings Account? What do you want to know about Future Scholar?