UESP fund helps students save for college
Students should start thinking now about their children’s college education, Joyce Kinkead, vice provost of Undergraduate Admissions, said.
According to an article in The Salt Lake Tribune, tuition and fees at a four-year public school have risen to $17,123 per year while public schools currently cost $3,754 each year.
With the cost of tuition rising, Kinkead said it is a good idea to start saving now.
One way to do that is with the Utah Educational Savings Plan Trust (UESP), a tax-deductible savings account which, according to the UESP Web site at www.uesp.org, is a program to “encourage adults to save for the future educational expenses of young people.”
Up to $101,650 can be cumulated through the program with a minimum deposit of $300 per year for each participant.
According to www.savingforcollege.com, the maximum contribution limit can be raised to more than $175,000 if the participant demonstrates an intention to save for a more expensive out-of-state college.
In an article by Kristen Davis in Kiplinger magazine, she said Utah has drastically improved its college savings plans since 1999, and there are 23 other state-run savings plans which are open to any U.S. resident.
The program is administered by the Utah State Board of Regents, acting in its capacity as the Utah Higher Education Assistance Authority, according to the UESP Web site.
Judy LeCheminant, director of the Financial Aid department, said parents often start these savings accounts, but it is very common for grandparents to do it as well.
According to the UESP Web site, anyone can contribute as long as the total contributions do not exceed the maximum cumulative amount.
When the child is ready to attend college, the funds can be accessed to cover qualified expenses which include tuition, fees, room, board, books, supplies and equipment.
LeCheminant said it is a good idea for students to begin thinking about saving, but is worried about students feeling too much pressure to save.
“I hate to see students who are really struggling start to think about saving more. It’s just one more pressure, and you should probably wait until you get established,” LeCheminant said.
She said saving money for their children’s education does not make sense unless the students are in a position to do so because most students are still trying to pay for their own education.
“I see people coming in still paying off their loans and their children are coming in, too, getting loans of their own,” LeCheminant said. “If students had enough money to start saving, we wouldn’t be giving them financial aid. Savings are a really good thing, but you should only save when you can.”
The benefits of using a state educational savings plan to start a college fund include tax incentives. According to the UESP Web site, both state and federal tax breaks can be earned.
The funds can also be transferred from student to student, LeCheminant said, so if one child decides not to attend school, another can use the money.
LeCheminant said another benefit of UESP is that it is not just a savings program but an investment because funds are conservatively invested to make money.
Utah State University does not deal much with the plan directly, LeCheminant said, because it is administered by the state, but when the program first began in 1997 she said there were quite a few people asking about it.
According to an article in the Chronicle for Higher Education found at http://chronicle.com/
daily/2002/04/2002041704n.htm, students who work more that 25 hours each week suffer academically.
The document, “At What Cost?: The Price that Working Students Pay for a College Education,” was released by the state Public Interest Research Groups’ (PIRG) Higher Education Project, and according to it, 46 percent of full-time students are being forced to work because of high tuition and inadequate federal financial aid.
According to the PIRG report, 63 percent of students who worked more than 25 hours a week said they would not be able to afford college without the work.
It is this financial burden that makes it important to start thinking about saving now, Kinkead said.