Lucky babies born May 29 in Vermont will receive a $100 deposit into a Vermont 529 college savings account opened in his or her name by the Vermont Student Assistance Corp (VSAC).
The Vermont Association of Hospitals and Health Systems is joining with VSAC, which administers Vermont’s 529 college savings plan, to help educate Vermont families about saving for college for their children.
A 529 plan is an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs. It is named after Section 529 of the Internal Revenue Code, which created these types of savings plans in 1996.
Vermont’s 529 college savings plan, called the Vermont Higher Education Investment Plan (VHEIP), helps families put a child’s college education within reach.
“College savings accounts are clearly a powerful tool,” said Scott Giles, president and CEO of VSAC. “We want to encourage parents to open a VHEIP account and get started early to save for college. The ideal time to begin saving is between birth and age 5 in order to allow your investment to build over time.”
Parents can open an account with just $25 or give a gift of any amount. Contributors can benefit with a Vermont state income tax credit and other tax advantages.
Research shows that children with college savings are three times more likely to attend college and four times more likely to graduate than children with no college savings.