Just the other day, I read an interesting article on the Business Insider, an online publication, about saving for children’s or grandchildren’s college education through College Savings Plans. It provided insight and information about the different aspects of 529 state-sponsored plans and why they are so popular.
When I first started to read the article, I must say, I had to re-read the first three sentences a couple of times. Because, the third sentence explains that these college savings plans are state-sponsored. Yes, you read it correctly: they are state-sponsored!
So, I had to go back and ask myself, “Wait a minute! Aren’t many of our states currently in the process of some sort of financial default?” I mean, we read in the newspapers and hear on the news that many states are currently cutting costs because they have a lack of funds. Aren’t many of these the same states that are currently viewing their pension plans as piggy banks to use for other expenses other than what they were designated for – retirement plans for their employees.
Excuse me, but if a state is unable (or unwilling) to allocate already designated funds appropriately, then why should they be sponsors of a college fund? The report, called 9 Things You Probably Don’t Know about 529 College Savings Plans, contains subtitles such as, “You can have more than one account,” “You can store a lot of money,” and “You can front-load the account.” Now, to me, these statements are actually saying, “We need money — now!” But, who knows? Maybe the college funds will be used for postponing the pension plan debacle.