State officials have introduced a new way for families to save for college.
Governor Bill Haslam, Tennessee Treasurer David H. Lillard, Jr., Lt. Governor Ron Ramsey and House Speaker Beth Harwell unveiled the Tennessee Stars College Savings 529 Program Tuesday morning at the Adventure Science Center Planetarium in Nashville.
The program offers family and friends a low-cost way to save for children's college expenses with attractive investment options and special tax advantages.
"In a competitive global economy, it is imperative that Tennessee children have access to higher education and develop a strong set of skills to help transition into the workforce. The Tennessee Stars College Savings 529 Program makes college savings cost effective, easy and relatively inexpensive, with a range of investment options," said Treasurer Lillard.
"This is a great opportunity for Tennesseans who want to attend college," Governor Haslam said. "College is not for everyone, but it needs to be for more Tennesseans if we're going to compete for jobs in today's market. This program will help increase student accessibility to a college education as we work to grow and recruit businesses to Tennessee."
According to a press release, the Tennessee Stars College Savings 529 Program is a tax-advantaged college savings plan that is designed to help Tennessee parents, grandparents and friends support the educational needs of loved ones. The plan takes its name from Section 529 of the Internal Revenue Service Code, which authorized the creation of tax-advantaged plans in 1996.
The plan is available to everyone and the investment returns on savings are tax free as long as they are used for approved education-related expenses. The money saved may be applied to higher education, including public or private colleges and universities inside or outside the state of Tennessee as well as any other educational entities eligible to receive federal student loan funds, such as Tennessee technology centers.
Participants have control over how they manage their investments with the Tennessee Stars College Savings 529 Program. The plan offers an age-based option in which investments are more aggressive when children are young and then become more conservative as the children approach college age. The plan also offers individual investment options, including domestic and international equities, balanced fund options, fixed income options, and an FDIC-insured option. The underlying investments for the plan will be offered from more than one fund company.
To encourage enrollment in the program, the Tennessee Department of Treasury is offering financial incentives to any Tennessee residents interested in opening accounts. Tennesseans who open accounts with at least $50 will each receive a one-time $50 match from the state. Tennesseans who roll over their entire account balances from other 529 college savings plans, including the state's prepaid plan, will each receive $100.
"We've worked to make sure that saving for college with the Tennessee Stars College Savings 529 Program is easy. Tennessee, this plan is for you. It has been designed by Tennesseans. It is managed by Tennesseans. And, if you call with a question, you'll be speaking with Tennesseans," said Treasurer Lillard.
Anyone interested in opening an account with the Tennessee Stars College Savings 529 Program can learn more by visiting www.TNStars.com or by calling (855) 386-7827 toll-free.
Businesses are also encouraged to make it easier for their employees to save by offering payroll deductions to the program.. Any business interested in offering payroll deductions can learn more by visiting www.TNStars.com or by calling (855) 386-7827 toll-free.
"We have a strong business community in Tennessee and business owners and human resource professionals can offer college savings through the Tennessee Stars College Savings 529 Program as a payroll deduction option for each of their employees," said Governor Haslam.