USD Magazine, Winter 2000

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New College Savings Programs Give Parents a Tax Break

F ear you'll never save enough for your children's college education, especially in light of terrifying predictions of a doubling in education costs over the next 18 years? Well, Uncle Sam has made saving a lot less scary, thanks to a 1997 change in the tax code that allows parents, grandparents and even future students to create tax-deferred savings accounts for college educations. All but five states (Arkansas, Idaho, Nebraska, Oregon and South Dakota) have some version of the savings program, which generaliy allows anyone to set up a college savings acco unt for the beneficiary of their choice, or themselves. The maximum amount deposited each year varies by state, but the acco unt grows tax-deferred until withdrawn for college tuition, books, room or board. Earnings are then taxed at the child's rate, which is usually 15 percent - considerably lower than their parents' tax bracket. California's program, ScholarShare, began last October and is available to all California residents, regardless of income. Accounts can be opened for as little as $25, and parents

can save more than $ 100,000 for their child's education. If that child doesn't attend college, the money can be transferred to a sibling, relative or anyone who attends college-level courses, including continuing education, graduate and law school. "We certainly emphasize starting the account as early as possible to compound the growth of the investment," says Tom Pinto, media relations director for TIAA-CREF, the investment firm that oversees California's program and aims for returns higher than the 5 percent annual college tuition growth .

To find out about a program in your state, contact the College Savings Plan Network at (877) 277-6496 or check the Web site at http://www.collegesavings.org. California residents can call ScholarShare at (877) SAVE4EDU.

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Online, It's About Time

Admittedly, we got stuck in the slow lane of the information .M. highway, but now that it's 2000, we're flipping on the blinker and going for it. You now can check out USO Magazine on the Web, where you'll find the latest editions of the magazine (we're gradually adding past issues), updates on your former classmates and a quick conduit to send us news, comments or class notes information. The site also provides links to the alumni home page, which offers an array of services including free e-mail, message boards and postings of alumni activities. Point your browser to http://alumni.acusd.edu/usdmagazine to find us.

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