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College savings should be on your mind all the time The month of September is typically the time when students of all ages settle into new routines, whether it involves basic K-12 curriculum, technical school training, or beginning classes at the university level. With the focus on back-to-school, the College Savings Plan Network, an affiliate of the National Association of State Treasurers, declared September to be National College Savings Month. In Arkansas, Gov. Mike Beebe proclaimed the month as College Savings Month in Arkansas as well. “As costs continue to escalate, education is becoming a primary concern for parents all over Arkansas,” said Martha Shoffner, Arkansas Treasurer of State and chair of the Arkansas Section 529 Plan Review Committee which oversees the Arkansas College Savings Plans (The committee is also staffed by Arkansas Department of Higher Education Interim Director Shane Broadway and Arkansas Teacher Retirement System Director George Hopkins). “Our message to parents is to encourage a disciplined savings plan in order to increase their children’s likelihood of success and to avoid over-reliance on student loans,” Shoffner
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said. “Early planning can pay big dividends when college approaches.” The Arkansas College Savings Plans consists of two taxadvantaged Qualified Tuition Savings Plans: the 529 Plan, named for IRS Section 529 in the tax code which authorizes such savings options and are sponsored by the state; the direct-sold Arkansas GIFT Plan and the advisor-sold iShares 529 Plan. The growth of funds invested in these plans is tax-deferred, both federally and on the state level, and are never subject to tax as long as the money is used for qualified higher education expenses. Arkansas residents invested in either one of these two state plans may also deduct up to $5,000 annually ($10,000 for married couples) from their taxable income for Arkansas state tax purposes. In addition, lower-tomoderate income families may qualify for up to $500 a year in matching funds (through the Aspiring Scholars Matching Grant Pro-
gram) for up to five years for contributions into the Arkansas GIFT Plan as a way to supplement these savings. “We have worked hard in Arkansas to make our state college savings plans an attractive option for families looking for ways to make their children’s dreams of the future a reality,” Shoffner said. “ The Aspiring Scholars Matching Grant Program has attracted attention from other states looking for ways to help lower-to-moderate income families build a financial bridge to higher education, and continues to assist Arkansas families of limited means in assuming a leading role in their children’s future success.” Complete information on the Arkansas GIFT Plan, the Aspiring Scholars Matching Grant Program, and the Arkansas iShares 529 Plan may be found online at www.arkansas529. org or by calling the Arkansas College Savings Plans office toll-free at (855) 686-2582.
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