For many families, higher education can be out of reach because of the financial burden it puts on the student and the parents. But a 529 savings plan could help make college a reality. The Milwaukee Journal Sentinel recently published a series of stories explaining 529 plans and exploring the potential for broader child savings plans.
WUWM has been partnering with the Milwaukee Journal Sentinel, Milwaukee PBS and the Milwaukee Public Library on an initiative we call Listen MKE. The latest event focused on 529 saving plans — how they work and how parents can access them.
The event took place last Thursday on Facebook live and was hosted by Journal Sentinel reporter Ashley Luthern. She was joined by Ashley Eckerson, the program manager for Fund My Future Milwaukee and Linda Lambert, the financial capability director for the Wisconsin Department of Financial Institutions. Lambert began the event by explaning what a 529 savings plan is.
"A 529 plan is named after the Internal Revenue Code. They started in 1996. So some of them are actually into 25 years of having an educational 529. So the 529 is the IRS code which it's named after. So it's a college savings program. And it's used to set aside funds not unlike a retirement 401k plan," says Lambert.
Programs like Fund My Future help Milwaukee parents navigate 529 saving plans says Eckerson. She highlights that the program has a close relationship working with the city of Milwaukee.
Eckerson says, "So we are actually the 529 Omnibus account for the city of Milwaukee. So we are the children's savings account for the city of Milwaukee where we allocate $25 worth of seed money for all the K5 kindergarteners within our participating cohort schools."
Lambert says 529 savings plans can have a significant impact on how children could view college. She points out that a child could increase expectations to go to college by 25%. The plan can also increase expectations to graduate by 64%.
"Just even having an account set up, it doesn't have to be a lot, it just sends the message to that child that somebody is invested in their future," Lambert acknowledges. "And it's something that's attainable. So it's something for them to think about and consider. [It really] talks about changing the mindset of individuals."
