Regular, small savings deposits add up for college

Many families want to save for their children's education but are uncertain how to start, especially if budgets are tight.

But college can be within reach, even for those with modest incomes, when saving begins early. Small monthly savings, if started when kids are young, can benefit from compound interest and earnings. And those regular contributions add up over time.

Now is a good time to start saving for your children's future or examine your savings to date.

By putting away as much as possible now, even $25 or $50 a month, you can open up college or other education options for kids and reduce their future debt, helping them as they begin their careers and lives after graduation.

Savings can be put aside in any way you want. But investing in a secure way that could earn you extra money is a good start.

College savings 529 accounts are specifically designed to pay education expenses. They also offer several benefits that a regular savings account does not.

For example, you can choose, and change, your investment strategy, so you can be more or less aggressive over time.

The 529 accounts offer tax benefits in many states, including Iowa.

Anyone can start or contribute to a plan, so family members and friends who want to help your child can easily do so.

Minimum investments are small so you can contribute over time, even when money is tight.

Some employers may offer matching benefits for 529 accounts.

Plans are transferable, so if one child doesn't need all the money, you can transfer it to another child.

You can always withdraw the money if needed before college, though there will be a tax penalty.

All states offer 529 plans. You can enroll in any you choose, but you should always check to see if there is a specific benefit to using your state's plan.

ISave 529 is the Iowa-sponsored 529 plan that lets you save for education expenses and provides certain tax benefits. Iowa taxpayers who are participants can deduct a certain amount of their contributions per beneficiary, including rollovers, in determining their adjusted gross income for Iowa income tax purposes.

Visit the ISave 529 website for more details and deduction amounts.

ISL Education Lending helps support Iowa parents who are saving for college with two programs.

The ISL Education Lending Scholarship is open to Iowa residents who are the parents of current Iowa high school students or undergraduate college students, as well as to the students themselves. Simple online registration is available at IowaStudentLoan.org/Savings between now and Dec. 5.

A parent or guardian may register once on behalf of each qualifying student and qualifying students may register themselves once. Forty-five $1,000 deposits into ISave 529 accounts will be awarded through random drawings.

Parents of eighth through 12th grade students can also sign up for ISL Education Lending's SP3 service at SP3.org for more chances to win money for college. SP3 sends twice-monthly emails with grade-specific college and career-planning tips for your students, and after reading the articles, you can enter for quarterly drawings for college savings account deposits.