CollegeBound Savings Month

by General Treasurer Seth Magaziner

September marks the end of summer and the beginning of a new school year for children and families across Rhode Island. For those of us who work in the Rhode Island Treasury, September holds additional significance as National College Savings Month. Our office has the privilege of administering the CollegeBoundfund, Rhode Island’s 529 college savings program. I want to take this opportunity to tell you about the program, and some of the benefits of starting early to save for college.

Families should begin planning for their child’s higher education as early as possible. The cost of college can be significant, and any amount that a family saves in advance can reduce their reliance on expensive student loans. In addition to the financial benefits of saving for higher education, there can be psychological benefits as well. Research shows that children with college savings accounts, even those accounts that are relatively small, are three times more likely to attend college and four times more likely to graduate than children without them.  Opening an account communicates the importance of pursuing higher education to children from a young age, and makes attending college feel like an attainable and worthy goal.

For these reasons and more we make it our goal here in the Rhode Island Treasury to encourage a culture of saving early for college. The Rhode Island Treasury’s CollegeBoundfund is an education savings plan designed to help families save for college. Families and friends can contribute to a child’s CollegeBoundfund account starting from birth, and the funds can be invested tax-free and spent on higher education expenses such as tuition, fees, and room and board. Rhode Islanders can also deduct contributions to CollegeBoundfund accounts from their state income taxes, up to $500 in annual contributions for single filers and up to $1,000 for joint filers.

This past January we launched another way to encourage families to save for college through the CollegeBoundBaby program. Under CollegeBoundBaby, children born in Rhode Island or children who are adopted receive a grant of $100. Parents of newborns can sign up for the $100 grant by checking off a box on the hospital form they use to obtain a birth certificate. Our hope is that this new program will dramatically increase the number of Rhode Island families who begin saving for their children’s future from day one.

Families can enroll in a CollegeBoundfund savings account either by enrolling on the website, speaking with a financial advisor or by calling the Rhode Island Treasury at (401) 736-1141. In honor of College Savings Month we are offering a $25 match to the first 529 Rhode Island families to open a CollegeBoundfund account in September. The education and well-being of our youth is the greatest investment any of us can make.

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