College Savings Plan Could Save Parents From Headaches in the Future

JONESBORO, AR (KAIT) -- Arkansas is ranked 49th in the number of people over the age of 25 that have their bachelor's degree.  Now, the state is working on a way to encourage more people to go to college.

One problem with getting people to go to college is the high cost.  It is often hard to find a way to pay for it.

"There are a lot of people that have two children pretty close in age that are in college at the same time and it makes it pretty difficult," said teacher and parent Joann Steed.

Nettleton English teacher Joann Steed has one child in college and another that is a senior in high school.  She says she knows that next year will be hard.

"Very few kids have the opportunity to go with everything paid.  There's always a good amount that you're responsible for as a parent," said Steed.

But the state is looking to make it easier for families saving for college.  Senator Gilbert Baker sponsored the legislation for a new program called "The GIFT College Investing Plan".

"The state is willing to come alongside and match, in some cases $2 to $1 or for those who have a higher income, $1 to $1," said Gilbert Baker.

People whose annual gross adjusted income is $30,000 or less the state will match two to one.  Those who make $30,001 to $60,000 the state will match one to one.  Parents, grandparents, and even friends are encouraged to open one of these savings plans and depending on income the state will match what they put in the savings account up to $500 dollars a year for five years.

"Do it for a first grader or a second grader and they'll wake up a senior in high school and have $9,000 or $10,000 available toward college needs.  Put that out there with an Academic Challenge Scholarship and they'll be well on their way," said Baker.

And that's something that can be done.  You can have this savings program and still qualify for scholarships like the Arkansas Challege Scholarship started by Senator Jerry Bookout and carried forward by his son Senator Paul Bookout of Jonesboro.

"This new program that we've passed is free money.  I don't want folks to get confused or tangled up.  Right now they put a few bucks away for college and the state will match that," said Baker.

The great thing is a family can put back as little as $10 a month and still get tax credit for that money both federal and state.  Tuition goes up every year at different universities across the state and that's why it's vital for many families to start saving now to send their kids to college.

"People can't always save and so this is a guarantee that they do have extra money even if they do get scholarships for books or maybe for housing," said school counselor Charlene Jernigan.

The money saved has to be used for college and can be used anywhere nationwide for tuition, fees, books and certain room and board expenses.