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College savings plans are a great gift idea for children

Some plans can be opened with as little as $25

FRANKFORT, Ky. (Nov. 20, 2014) — Opening a college savings plan for children during the holidays is a great and easy gift idea.

Kentucky’s official 529 college savings plan is the Kentucky

Show me money loKentucky Education Savings Plan Trust (KESPT) is an investment account with tax advantages designed to help families save and pay for college. The plan also offers a unique eGifting feature that allows parents to invite family and friends to make secure contributions with just a few clicks.

“Education truly is the gift that never stops giving. Paying for college has changed in recent years, so we try to help families understand the financial obligations of higher education,” said David Lawhorn, KESPT program administrator. “Families who start saving early will be better prepared. There are also tax advantages associated with 529 plans, so year-end is a good time to consider investing in the KESPT college savings program.”

According to the U.S. Census Bureau (Current Population Survey, 2013 Annual Social and Economic Supplement), a person with a bachelor’s degree or higher earns a median income that is 69 percent higher than someone with a high school diploma. Over a lifetime, the difference in earning potential can be more than $800,000.

The most popular vehicles used for college savings in the commonwealth include savings accounts and 529 college saving plans, according to a 2013 study of Kentucky families by ORC International, but only 529 plans offer tax-free treatment when withdrawals are used for qualified higher education expenses.

Two-thirds of parents surveyed were familiar with 529 plans, but only 51 percent of parents who were familiar with 529 plans were also aware of the tax benefits. The study found that Kentucky parents save an average of $104 per month toward their child’s college tuition.

A KESPT account can be started with as little as $25 and can be used at any qualified institution in the nation. For more information about KESPT, tax advantages and the eGifting feature, visit kysaves.com or call toll-free 1-877-598-7878.