Women’s History Month was a great opportunity to meet a few of the many awesome women helping families save and plan for their children’s education after high school. My College Corner’s John Hupalo recently did short interviews with some of these leaders at gatherings of state treasurers (National Association of State Treasurers), education savings experts (College Savings Foundation), and state-based organizations offering loans and outreach services (Education Finance Council). They shared tips, offered historical perspectives, shared proud moments, discussed innovation, and talked about solutions for big problems.
MCC: What is the one piece of advice you offer Californians with regard to saving for college?
Fiona Ma, California State Treasurer: It’s never too early to save for college. My parents saved money for my brother, my sister, and I since birth. And that meant that we did not have to have high student loan debt and were able to start our lives buying a house and starting a family earlier rather than later. So it’s important. Never too early to save!
Treasurer Ma set the tone for this series with her emphasis on the importance of saving early.
Of course, transformative change has to start somewhere and we found someone at the ground floor of what became the world of 529 programs.
MCC: What makes you most proud of Michigan’s 529 program?
Robin Lott, Executive Director from the Michigan Office of Postsecondary Financial Planning: In Michigan, we’re most proud of being the office that sort of started the whole 529 movement. When Michigan rolled out the program in 1988, there was no such thing as Section 529 of the Internal Revenue Code. Everyone was going to the IRS for a private letter ruling and some were getting denied because they didn’t have full faith and credit of the state.
So Michigan had to fight a legal battle to win that opportunity to be recognized as a qualified program that was tax exempt. We did go to court over the matter and because it was a winner at the appellate level, we were able to actually spur what we now know as 529 of the Internal Revenue Code. We were the spark that led to the section of the code that now everyone is able to enjoy. And even though we started out as prepaid, it opened up a whole world of 529 direct-sold and advisor-sold plans in addition to the prepaid option.
Robin’s history lesson provided important context for four more women who have played significant roles in creating and advancing 529 savings and pre-paid programs.
Mary Morris, Chief Executive Officer of Virginia529, the largest 529 program in the country, on their secret sauce for continued success of 529 plans across the country.
Oh, it’s the passion for it. The mission and the team that I get to work with at Virginia529, through CSPN (College Savings Plan Network) and the greater NAST community (National Association of Treasurers), which is just a great group of folks who want to do better for families in many ways.
The education savings initiatives that we have are to help make education affordable. It’s all about educational access and affordability for all of us. And then, broader than that, we go into complete financial health and well-being with disability savings, with retirement savings, with financial education for people, that whole broad, holistic view to help Americans all across the country to plan and prepare for the future. There’s so much passion around it that you find a lot of us old-timers hanging around for a very long time because what we do every day is fun, rewarding, and wonderful.
Liz Fontaine, Assistant Executive Director of the Massachusetts Educational Financing Authority, on MEFA’s innovations over the last 20 years in the college savings plan world.
In many ways, MEFA was a pioneer in the college savings world at the ground level when the legislation was first being considered. To see the growth and the expansive nature of all the families that we’re reaching across the Commonwealth of Massachusetts through structured college savings programs, all of the planning tools, the financing programs, the guidance and support that we provide families, we find that is all the difference in the world.
There are more families making postsecondary plans today. Success after postsecondary education. And their careers are taking off because of the growth of these programs and the work we’ve done in the community.
MEFA was one of the first states to launch private credit loan programs and then establish both 529 savings and prepaid programs.
Vivian Tsai, Head of Relationship Management, Education Savings, TIAA, on the importance of industry conferences in helping foster collaboration and the exchange of ideas to create better programs.
Every year, the College Savings Foundation gets 150 of the best and brightest minds in college savings and education savings together. I’m excited because there are a lot of great changes coming, and attention being paid toward 529 plans as the premier education savings vehicle. With Secure 2.0, the Roth rollovers of excess balances in 529 plans have made 529 plans even more accessible, more flexible, and really help contribute to what was initially an education living vehicle becoming a lifetime retirement vehicle.
So there’s a lot to be excited about. We have many interested on Capitol Hill in the usage of 529 plans and the application of education funds toward certification courses, apprenticeships, continuing education. There’s so much to celebrate and alot of work to be done on behalf of American families all over the place.
Joanne Dashiell, Chief Marketing Officer for PC529 at CollegeWell, on their unique prepaid college programs.
Most families are familiar with traditional 529 savings or investment plans, where your contributions are invested in the market. But there are a handful of states and other organizations like Private College 529 that offer prepaid 529 plans. These come with the same federal tax benefits as all 529 plans – tax-free growth and tax-free withdrawals – as long as they are used for qualified education expenses. And our prepaid plan allows you to lock in current tuition rates at 300 private institutions across the country. So you have the current rates that you’re saving and you can use that in the future for future tuition.
According to Paul Curley at ISS, as of December 31, 2023, there were nearly one million 529 prepaid accounts opened with investments totaling approximately $24 billion in 529 prepaid accounts.
And yet, with nearly $1.7 trillion of U.S. student loan debt impacting some 44 million Americans, according to the Education Data Initiative, and with the proliferation of headlines regarding student loan forgiveness, My College Corner sought out an expert for comment.
Gail daMota, President of the Education Finance Council, on the one thing that could be done to get the student loan default rate under control.
I think we should be providing more grants and greater grant money to the students with the highest need, instead of front-loading them with student loans and holding onto the hope that at some point in the future their loans will be forgiven. We should not be lending money to people who have no hope of repaying it in the future.
Education Finance Council members are state-based not-for-profits empowering student success with emphasis on counseling families to borrow smartly.
My College Corner is grateful to Treasurer Ma, Robin, Mary, Liz, Vivian, Joanne, and Gail for their hard work and dedication, and for visiting My College Corner.