FOR IMMEDIATE RELEASE
Monday, April 2, 2007
Tallahassee, Fla. – Think what parents and grandparents buy for children. All the teddy bears, tricycles, dinosaurs, dolls, skateboards, books, T-shirts and video games that a child will get and outgrow could be piled high enough to bump the ceiling.
Something children don’t outgrow is an investment in their college education. Now is a good time, as Floridians face the April 17 deadline of paying their 2006 U.S. taxes, to think about tax-free savings for college.
"It makes me feel like I’m really taking care of her future," said Donald Bickel, who opened a Florida College Investment Plan account for five-month-old daughter Erica. Tampa business owner Bickel said he and his wife Monica "wanted to save in advance. It’s something we talked about before we had her. It’s pretty essential. I think it’s just as important as all the other things we’re buying for her." He also purchased a Florida Prepaid College Plan to provide the flexibility of having both plans to cover college costs more completely, especially if Erica attends an out-of-state school. "It’s a perfect fit," Bickel said.
Starting with as little as a $25 per month automatic bank withdrawal or a $250 initial deposit, a parent, grandparent or friend can sign up with the Florida College Investment Plan. Tax-free savings will accumulate in that plan for a child’s future use while attending any accredited public or private university, college or technical school in the country. Consider putting part of one’s 2006 tax refund in the plan. Or choose the plan as a way to protect future income from taxes. Today’s average balance in the Florida College Investment Plan is $5,320, but the savings can go much higher.
"The Florida College Investment Plan is for the little guy and the big guy. It takes the headache out of investing for a child’s college education," said Ted Hoepner, chairman of the Florida Prepaid College Board.
The board manages the Florida College Investment Plan and the separate Florida Prepaid College Plan, which sells tuition contracts at today’s prices for tomorrow’s college education. Both are 529 plans authorized under the federal Internal Revenue Code.
"It’s for their education," said Kechia Story of why she pays monthly into the Florida College Investment Plan for son Gyasi Jr., eight months old, and daughter Jakeira, two years old. "Do I enjoy paying? Sure. I don’t complain," said Story, a cost schedule analyst in Orlando who graduated from University of Central Florida. Her own college education "was almost not an option, because of money," said Story, the first in her family to attend college, and "I don’t want to be the last." She and her husband Gyasi Story also decided to invest in the Florida Prepaid College Plan.
Five investment options are offered to purchasers of the Florida College Investment Plan, with earnings varying year to year. Performance of the plan included a 13 percent return in the U.S. equity investment option and a 4.58 percent return in the money market investment option for the year ending December 31, 2006. There is a single annual fee for managing an account, which is $7.50 per $1,000 or ¾ of every 1 percent invested, plus a one-time $50 application fee.
Some 24,326 accounts were open in the plan as of March 23, 2007. Ninety-four percent of plan owners are Floridians, but neither the owner nor the beneficiary must be Florida residents. They are required to be U.S. citizens or resident aliens with a Social Security number.
"She’s actually very excited," Jeff Sanchez of Orlando said of starting a Florida College Investment Plan this year for 13-year-old daughter Dakota, who dreams of enrolling in veterinary school someday. "I know how the cost of college is so high." Sanchez liked the flexibility of the Florida College Investment Plan, in which the savings can be spent at any accredited public or private U.S. university. "She might want to go out of state," he said. "I thought this is the perfect way to save money in a tax-free environment."
Dollars invested in the Florida College Investment Plan may be used for college-eligible expenses ranging from tuition and fees to books, meals, rent and graduate school. Or the money can supplement other resources such as the Florida Prepaid College Plan or Bright Futures scholarship. To enroll in the Florida College Investment Plan or to get more information, go to www.florida529plans.com or call 1-800-552-GRAD (4723).