Statewide college savings programs reporting major losses from the economic downturn are still a safe bet for frugal families, according to financial experts.
College savings primer» What are 529 plans? These plans are tax-advantaged investment tools used for future higher education costs.» Who can invest? Anyone can open a 529, but to receive the state tax credit (up to $4,000 in D.C., $4,000 in Virginia starting in 2009 and $2,500 in Maryland), the investor or the beneficiary must be a resident.» When can they be opened? Prepaid college tuition plans can be enrolled in at birth, or in Virginia between December 2009 and February 2010, and in Maryland between December 2009 and April 2010.» Where can I find information? The Web site collegesavings.org has information on each state’s plans.
Maryland’s Prepaid College Trust, a pool of money paid by parents locking in current university tuition, fell to 87 percent funded in December, from 109 percent in June 2008, according to a state audit released Tuesday. That means that if all of the nearly 6,000 enrollees, newborns to high school seniors, were to go to college tomorrow, the fund would come up short.
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