UESP celebrates 20 years with College Savings Day promotion

The Utah Educational Savings Plan has been helping families save for college for 20 years. UESP ended its first year in 1996 with 157 accounts, one investment option, and $154,000 in managed assets. Twenty years later, UESP has expanded to include 14 investment options, more than 305,000 accounts, and more than $8 billion in assets under management.

UESP’s success reflects the public’s trust in Utah’s official tax-advantaged 529 plan as a means to help save for college.

Regular savings of even small amounts may make college more affordable. Money saved in a 529 college savings account is money that a college student will not have to borrow and repay with interest.

The time and money invested in higher education may boost future earning potential. U.S. Census Bureau [1] research reveals that a college graduate earns an average of $1 million more over the course of a career than a high school graduate.

Funds dedicated for college savings also can deliver results that go beyond finances. Research [2] confirms that children with $500 or less in a college savings account are three times more likely to enroll, and four times more likely to graduate from college.

A UESP account is a powerful tool for those whose hopes and dreams include a college education.

To celebrate 5·29 College Savings Day, UESP is offering a promotion that underscores the value of saving for higher education.

New account owners: If you open your first UESP account on May 25, 2016, and contribute at least $25 that day, UESP will provide a $25 match to your account until promotional funds are exhausted.

To qualify, you must be a Utah resident, and both you and your beneficiary must be new to UESP—the beneficiary does not need to be a Utah resident.

Opening a new account online is easy. Go to uesp.org, click Open an Account, and follow the prompts. Accounts opened and contributions made online must be received on May 25, 2016, by 11:59 p.m., Mountain Time (MT). Enter the promotion code 25ON525 during the account setup process.

You can also open an account by submitting an Individual Account Agreement (form 100). Individual Account Agreements submitted by mail, fax, overnight carrier, or in person must be received on May 25, 2016, before 5 p.m., MT, at UESP, State Board of Regents Building, 60 South 400 West, Salt Lake City, UT 84101-1284. The Individual Account Agreement is available for download at uesp.org or by calling 800.418.2551. Enter the promotion code 25ON525 in the space provided on page 8 of the Individual Account Agreement.

New account owners will enjoy the flexibility that makes UESP one of the top-rated 529 plans in the country. No ongoing contributions are required to keep a new account active, so account owners can invest as much and as often as their budgets allow.

Earnings on contributions to a UESP account grow deferred from federal and Utah state income taxes, and withdrawals used for qualified higher education expenses are exempt from federal and Utah state income taxes. Qualified expenses include tuition and fees; required books, supplies, and equipment; computers, peripheral equipment, related software, and Internet service; and certain room and board costs at any university, college, or technical school in the United States or abroad that participates in federal student financial aid programs.

In 2016, a trust or single Utah taxpayer who files a Utah state income tax return can claim a 5 percent tax credit on contributions to a UESP account up to $1,900, for a maximum credit of $95 per qualified beneficiary. Spouses filing jointly can claim a 5 percent tax credit on contributions up to $3,800, for a maximum credit of $190 per qualified beneficiary. In order for an account owner to claim the credit, the beneficiary must be younger than age 19 when the account is created. If this requirement is met, the account owner can claim the credit each year a contribution is made for the life of the account.

If you have questions, visit uesp.org, send an email to info@uesp.org, or call 800.418.2551 toll-free.


 

[1] Source: Julian, T., & Kominski, R. (2011). Education and Synthetic Work-Life Earnings Estimates (Vol. 14, American Community Survey Reports, pp. 1-14, Rep. No. ACS-11). United States Census Bureau. Retrieved from https://www.census.gov/prod/2011pubs/acs-14.pdf.

[1] Source: Elliott, William (Ed.), (2013). Building expectations, delivering results: Asset-based financial aid and the future of higher education. In Biannual report on the assets and education field. Lawrence, KS: Assets and Education Initiative (AEDI).

 

Important Legal Notice

The Utah Educational Savings Plan (UESP) is a Section 529 plan administered and managed by the Utah State Board of Regents and the Utah Higher Education Assistance Authority (UHEAA).

Read the Program Description for more information and consider all investment objectives, risks, charges, and expenses before investing. Call 800.418.2551 for a copy of the Program Description or visit uesp.org.

Investments are not guaranteed by UESP, the Utah State Board of Regents, UHEAA, or any other state or federal agency. However, Federal Deposit Insurance Corporation (FDIC) insurance is provided for the FDIC-insured accounts. Please read the Program Description to learn about the FDIC-insured accounts. Your investment could lose value.

Non-Utah taxpayers and residents: You should determine whether the state in which you or your beneficiary pays taxes or lives offers a 529 plan that provides state tax and other benefits not otherwise available to you by investing in UESP. You should consider such state tax treatment and benefits, if any, before investing in UESP.

UESP does not provide legal, financial, investment, or tax advice, and the information provided in this document does not contain legal, financial, investment, or tax advice and cannot be construed as such or relied upon for those purposes. You should consult your own tax or legal advisor to determine the effect of federal and state tax laws on your particular situation.