A day to recognize the importance of saving for education
As thousands of Delaware families prepare to celebrate high school graduations, many pair that joy with fear about how to pay for college.
State Treasurer Colleen Davis reminds Delawareans that a DE529 account can alleviate that fear and that 529 Day is a perfect time to start saving.
“Almost 10 percent of all Delawareans have student loans averaging more than $37,000,” Treasurer Davis said. “Each year it becomes harder and harder for families to afford a quality education without setting themselves up for years of student loan payments but enrolling in the DE529 Education Savings Plan can help.”
The DE529 Education Savings Plan provides a tax-advantaged program for Delawareans. Money from DE529 accounts can be used at almost all accredited colleges and universities nationwide and many vocational or technical schools for a wide range of qualified education costs. Money grows tax free, plus, withdrawals for qualified education expenses like tuition, fees, and books are federal and Delaware income tax-free.
“Section 529 of the internal revenue code allows for tax advantaged education savings programs, and that’s why May 29th became 529 Day,” Davis said. “The more we raise awareness of the DE529 Education Savings Plan, the more people we help, and thankfully, the message is working.”
New accounts in the DE529 Education Savings Plan reached almost 2,100 in 2021, an increase of 9% over the previous year. Contributions to DE529 accounts totaled $64.8 million in 2021, with deposits in December alone accounting for $6.89 million, the highest monthly total since 2016.
A new law awaiting the Governor’s signature could help Delawareans save even more. Sponsored by Rep. Krista Griffith and Sen. Trey Paradee, House Bill 145 creates a tax credit of up to $1,000 for contributions to a DE529 account. The bill received approval of the legislature in March. Additionally, members of the Delaware General Assembly officially declared May 29th “Delaware 529 Day” with the passage of HCR 83 earlier this month.
Continuing to make people aware of the benefits of saving with a DE529 account is a main focus of 529 Day, and that includes children.
“Engaging young people not only educates them, but also engages creativity, helping them to be prepared to thrive in their future,” Treasurer Davis said. “Our DE529 Education Savings Plan similarly builds a bright future for young people by helping them become college and career ready financially. We are proud to partner with the Delaware Museum of Nature and Science to share the importance of combining education and fun for Delaware’s children now that the facility has opened its doors for the first time since the end of 2020.”