Why don't more parents use the advantages of 529 Plans?

L

Lon

Well-known Member
Location
Central California
[h=4]WHAT IS A 529 PLAN?[/h]
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.
[h=4]State plans are OK for out of state colleges[/h]529 Plans can be used to meet costs of qualified colleges nationwide. In most plans, your choice of school is not affected by the state your 529 savings plan is from. You can be a CA resident, invest in a VT plan and send your student to college in NC. Check to see if your institution is eligible under 529 rules.
 

You are making the assumption that most parents have extra money to put away for their kids' education.. many don't and are barely keeping their heads above water buying food and housing.. Saving is a luxury these days. Who has extra after the essentials are paid for?
 
QuickSilver said:
You are making the assumption that most parents have extra money to put away for their kids' education.. many don't and are barely keeping their heads above water buying food and housing.. Saving is a luxury these days. Who has extra after the essentials are paid for?
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I don't assume anything about anybody or anything. But there are parents that could and should provide if it weren't for for their own personal and selfish life style. You might say it's a sense of responsibility that some accept and some do not.

Your response is typical Bleeding Heart.
 

Our kids both got good scholarships, so our college costs were manageable. We helped a bit with the Grandkids educations, but they too had scholarships, so between us and their parents, it was no big deal. However, I watch the Grandkids and their careers, and wonder sometimes how they will manage these soaring costs 10 or 15 years from now.
 
Your response lacks compassion, and references a world that is gone in both our countries, except for a privileged few. The time of the old white privileged male middle class is fading fast.
 
Lon said:
I don't assume anything about anybody or anything. But there are parents that could and should provide if it weren't for for their own personal and selfish life style. You might say it's a sense of responsibility that some accept and some do not.

Your response is typical Bleeding Heart.
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I think your response is typical "I've got mine... so to hell with everyone else.."
 
Shalimar said:
Your response lacks compassion, and references a world that is gone in both our countries, except for a privileged few. The time of the old white privileged male middle class is fading fast.
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Fortunately this group is dying off.. These are the same people that deny White Privilege.. They were born on 3rd base and think they hit a triple.
 
While I agree parents in particular should do anything they possibly can to help pay for their child's education the 529B itself has cost problems which dissuade those that "could" save from using it as "a" tool to HELP pay for tuition. Since it's inception the 529B lacked a wow factor and is susceptible to market fluctuations. So called tax savings don't mean much to those who can't save or make enough money as is.

http://www.bloomberg.com/news/artic...of-people-don-t-use-529-college-savings-plans

The biggest problem with any type of plan including obtainable loans to pay for college is that they perpetuate college tuition inflation. If these colleges know someone else is paying for it they will price based on who is paying and rather than actual cost & reality. College tuition has been EXCEEDING inflation for about a quarter century now.

This from a 1991 article:

http://articles.philly.com/1991-10-...college-tuition-economics-of-higher-education

This from last year

http://www.nbcnews.com/feature/fres...ses-continue-outpace-inflation-report-n457396

Costs CONTINUE to exceed inflation.

A quarter century of exorbitant tuition costs exceeding the capabilities of the local/domestic economy? NO. Any scheme, plan or tact use to throw money at the problem of college tuition & inflation simply will not work let alone unsustainable.

Also as many of these 529B plans are more or less a mutual fund, since it's inception years ago it is well known that many mutual funds are basically a rip off or bad investment because of costs, fees and portfolio management. This plan is dated from a different and not completely informed era. Still one needs to anything they can to continue education for themselves or children, this is not a spur of the moment decision.
 
A lot of people don't have the luxury of having money left over after just putting food on the table and a roof over the heads of their families, and thus, no money to invest in this type of program. That's not a selfish lifestyle, it's providing for the immediate needs of their families. Not everyone is as fortunate as you have been, Lon, and many struggle just to live day to day. All it takes is a lost job or an illness to bring the best laid plans crashing down.
 
Lon said:
I don't assume anything about anybody or anything. But there are parents that could and should provide if it weren't for for their own personal and selfish life style. You might say it's a sense of responsibility that some accept and some do not.

Your response is typical Bleeding Heart.
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You know what I always say when someone accuses me of being a 'bleeding heart'? It proves I have one.
 
We have 5 Grandchildren, so doing for all five would be a bit tough, unless we dug deeper into our pockets. I know that you wrote parents, but some grandparents also have 529's for their Grandchildren. We have trusts set up for each that we deposit money into for B'days and Christmas. It won't send them to Harvard, but it may get them through a year or so of paying a portion of their massive college bills, if they decide to go. Otherwise, they will receive the payout at age 25.
 
I have a certain sympathy for Lon's views. Of course not everyone can fully fund their childrens' education, but I would hope that they made what contribution they could. I don't know how things work in the USA. Here in Scotland, university education is free for Scottish residents, but of course there are still living costs. In England, university courses typically cost £9k ($13k) per year. Loans are available, but many graduates start working life with large debts that take years to pay off.

When my children were at uni, fees were much lower and I could afford to pay for their education and upkeep.
My elder daughter was lucky and won a scholarship to study for her Phd so saved daddy £15k in fees. Now she is a senior lecturer and her course depends to a large extent on foreign students who have received generous sponsorships.
 

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