first_imgVermonters are part of the rising tide of enthusiasm nationwidefor “529” college investment programs (named after a provision in theInternal Revenue Service code). Enrollment in Vermont’s 529 plan, theVermont Higher Education Investment Plan, rose to 2,378 accounts in 2002,an increase of 74.5 percent from 2001. Investments in the plan were valuedat more than $15 million at the close of 2002, compared with $8 million ayear before. The state’s college investment vehicle has proven popularwith residents because of several key features:* Earnings on withdrawalsused for qualified higher education expenses are free of federal and stateincome tax. * Students have flexibility to use the funds at nearly allcolleges in the United States and some abroad. * The minimum required tocontribute is only $25 at a time or $15 per pay period by payrolldeduction. * The maximum account balance per beneficiary is $240,100.”The fourth quarter usually sees the heaviest volume of contributions tocollege investment plans as people look to keep on track with theirfinancial planning,” said Rich Westman of the , the program’s sponsor. “However, we witnessed solidgrowth in new accounts and contributions to existing accounts throughoutthe year, indicating that families are trying to stay ahead of risinghigher education costs.”TIAA-CREF Tuition Financing, Inc., part ofTIAA-CREF, manages the program. The organization is the largest manager ofstate-sponsored college investment programs, working with 13 states.For more information about the Vermont plan, call 1-800-637-5860 or visitwww.vsac.org(link is external). If you are not a Vermont resident, or if you have taxableincome in another state, consider whether the other state offers a 529plan with favorable state income tax or other benefits not available ifyou invest in the Vermont plan. The plan Disclosure Booklet should be readcarefully before opening an account. The State of Vermont, VSAC, TIAA-CREFTuition Financing, Inc., Teachers Insurance and Annuity Association ofAmerica and its affiliates do not insure any account or guarantee itsprincipal or investment return. Account values will fluctuate based upon anumber of factors, including general financial market conditions.Investments are made through Teachers Personal Investors Services, Inc.,as distributor.*The law allowing federal tax-free qualified withdrawals is set to expireon December 31, 2010. Congress may or may not extend the law.last_img