Program Expansion Makes Saving for College Easier
With the rising cost of a college education, coming up with tuition has become a daunting task for most New Yorkers. Like so many of us, I was faced with the challenge of finding ways to finance my three children’s college education. Having faced this endeavor, to give my children the best opportunities for a higher education, and witnessing first hand the skyrocketing costs of a college education, I stand steadfast in support of The New York State College Choice Tuition Savings Program. This program has provided a flexible, low-cost way for individuals to save for college for years. A new law has expanded the program to allow relatives, employers and others to make contributions to the account – making saving for college easier than ever (Ch. 81 of 2008).
The New York State College Choice Tuition Savings Program was created in 1998 as a way to allow program participants to quickly accrue more money in program accounts, giving families better opportunities to meet college expenses. The accounts, called 529 accounts, are tax-deductible for New York State residents who open an account, and withdrawals for qualified higher education expenses are tax free.
Until now, however, deposits could not be made by anyone other than the account owner. The state comptroller’s office, which administers the program, reported frequent complaints over the years about third-party contribution restrictions. This new law will bring New York State in line with more than 30 other states that have similar laws.
By allowing grandparents, aunts and uncles, and any other interested party to make contributions to the specific 529 account; they can help their loved one get that much closer to realizing the dream of a college education. Generous family members and friends can feel confident knowing that their contributions are going to a safe place and toward a great cause – the education and opportunity for a brighter future for someone they love.
The New York State College Choice Tuition Savings Program currently has approximately 600,000 accounts and has helped New Yorkers save $8.3 billion for college expenses. In the past five years, however, more than 20,000 checks, valued at $57 million, were rejected from program accounts because they were submitted by someone other than the account owner.
As the father of three children who all attended college, I know firsthand the burden that working families face when trying to ensure our children get a quality education. In today’s troubled economic climate, it is important to make sure that every New Yorker has the opportunity to pursue a higher education. This law will help Syracuse families cope with the rising costs of obtaining a college education by giving prospective students the chance to save as much as possible before they start their college career.