State treasurer: Never too early to save for college

May 25--Kelly Mitchell knows what it's like to graduate college in debt.

Mitchell, Indiana's state treasurer, was the first person in her family to graduate from college. When she went, no one knew the importance of saving.

"I graduated college with a lot of student loans," she said. "This is a real personal passion of mine, is to encourage young people and parents to begin to save for their children to attend college."

On Thursday, Mitchell discussed the Indiana CollegeChoice 529 direct savings plan at the University of Southern Indiana. The program, celebrating its 20th anniversary, is a tax-free way to save for post-secondary plans or higher education.

Mitchell stressed it's never too early or too late to start saving, because while it may seem small now, it all adds up.

Anyone can open or invest in an account -- aunts, uncles, grandparents and parents -- even adults planning to go back to school. It costs $10 to open the account. Withdrawals for educational purposes are tax-free and contributions to the account earn a 20-percent state tax credit up to as much as $1,000 annually.

Wanting to dispel a few myths, Mitchell added that the money doesn't have to stay in Indiana, and it's not strictly for two- and four-year colleges.

The accounts aren't limited to funding a bachelor's, master's or doctoral degree. The funds can also be used for trade or technical schools, graduate programs, or any institution that accepts federal financial aid, Mitchell said.

Features of CollegeChoice 529 plans include: tax-deferred investment growth; tax-free withdrawals for qualified expenses, which can include tuition, room and board, computers and laptops, and books; gift- and estate-tax benefits; control over how assets are used; and flexibility to use the funds at eligible colleges, universities and vocational schools worldwide.

It takes about 10 minutes to enroll online, Mitchell said, at collegechoicedirect.com.

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