Paying for college is one of the biggest financial concerns for students and families which means that saving for postsecondary education and training is more important than ever.
One study found that when children have a savings account in their name, they are seven times more likely to attend college. Additional research has found other benefits for savings accounts including positive effects on people’s expectations and confidence about the future and their future plans.
In spite of a shared belief that college is an investment in the future, less than half of families with children under the age of 18 are saving for college. Low-income families and parents without a college degree are less likely to be saving for postsecondary education. 61% of non-savers say they are not saving because they don’t have the money.
The most common college savings plans are known as 529 plans and offer tax-free investment options. By federal law, all 529 college savings plans must be state sponsored. Residents of any state can invest in any state's 529 Plan; you do not have to be a resident of a particular state to invest in that state's plan. However, there may be tax advantages available only to state residents for any particular state sponsored plan. Learn more about the Oregon College Savings Plan.
IDA's are matched savings accounts that help low-income families save for a goal such as a home or postsecondary education.
"This money will help me pay for tuition, in turn helping me start a career."
In addition to the matched savings, students complete a comprehensive financial education course. "This along with monthly deposits helps participants develop sound financial skills that stay with them long after finishing the program," said Chriset Palenshus, IDA Specialist for NeighborWorks Umpqua.
"It is a fantastic opportunity and the students who have taken advantage of it are glad they did," said Lisa Smart, the GEAR UP Coordinator at Reedsport Charter School.