NEW ORLEANS – Credit Human is encouraging families to take advantage of 529 college savings plans as a way to manage rising higher education costs, highlighting the tax benefits and long-term savings potential.
A 529 savings plan is a tax-advantaged investment account designed to help families save for qualified education expenses, including tuition, fees, books, and even certain room and board costs. Earnings in a 529 plan grow tax-free, and withdrawals remain tax-free when used for eligible educational expenses. According to the IRS, families can contribute as much as $19,000 per year per beneficiary.
“Many families feel overwhelmed when they think about the cost of higher education, but starting a 529 plan—no matter how small the contribution—can help ease that burden over time,” said Jennifer “J.J.” Jaskierny, Operations Manager in New Orleans for Credit Human. “It’s not about having all the answers today. It’s about taking that first step and building a habit that can reduce financial stress down the road.”
Unlike traditional savings accounts, 529 plans offer flexibility and long-term growth potential. Research from the Education Data Center has found the average 529 account has a balance of about $31,000, and these accounts have grown at a compound interest rate of 5.7 percent annually.
Funds can be used at most accredited colleges, universities, and even some vocational schools across the country. Additionally, if a student does not use all the funds, the account beneficiary can often be changed to another eligible family member.
“Families often underestimate how much even small, consistent contributions can grow over time,” Jaskierny added. “By starting early, you give your savings more time to compound, which can significantly reduce the need for student loans later and reduce your family’s overall financial stress.”
Louisiana Tax Benefits and START Saving Program
In Louisiana, the state’s official 529 plan is called START Saving. It offers its own benefits for Louisiana residents, including deductions from taxable income of up to $2,400 per beneficiary per year for single filers and $4,800 per beneficiary per year for married couples filing jointly.
The program is part of broader efforts to make higher education more accessible and reduce long-term student debt, a factor often cited by employers as impacting workforce stability and recruitment.
Credit Human Recommends Concrete Action
To realize the greatest benefit of a 529 savings plan, Credit Human recommends the following steps:
- Start early, even with small contributions, to maximize compounding growth over time
- Set up automatic monthly contributions to build consistency and guarantee that it is funded
- Encourage family members to contribute to the fund for birthdays or holidays instead of or in addition to traditional gifts
- Review and adjust the plan periodically as financial situation or goals change
“With the end of the school year being an annual point where families look forward, now is an ideal time to plan ahead,” Jaskierny says. “Whether or not you’re a Credit Human member, the Member Relationship Specialists at any Credit Human Financial Health Center can help with planning for 529 Savings plans with no strings attached. It’s one part of our mission to help create communities free of financial stress.”
