LITTLE ROCK, Ark. — The Arkansas 529 College Investing Plan, administered by the Treasurer of State's office, helps parents save for their child's education in a climate where education costs are soaring. On Thursday, Arkansas 529 and DHS's Division of Children and Family Services announced that foster parents can now help the children in their care save money for college.
Treasurer of State Dennis Milligan stopped by Arkansas Today to tell us more about college savings.
What spurred this partnership with DHS's division of children and family services?
"As I was speaking to a group, a foster parent approached me and said we were missing one of the most vulnerable populations in the state: foster children. We saw this segment of our state's children, who are already disadvantaged, as being on an unequal playing field when it comes to post-secondary education. At the heart of the Arkansas 529 program is the notion that saving for higher education is possible for every person, regardless of their financial background. We want to ensure that every child in our state has equal opportunity for higher education."
Who can open an account for a foster child and what happens to the account if the child is adopted?
"Any foster parent can open an account for a child. Until the child is either adopted or ages out of the foster care system, the ownership of the account will remain with DHS. If they are adopted, the money follows the child and ownership is transferred to the adoptive parent. If they age out of the foster care system, the account will be placed in their name and they will be able to manage it."
So what are the benefits to the Arkansas 529 investing plans?
"Your 529 plan is used to pay for qualified education expenses. No federal income taxes are owed on the distributions, including the earnings. It allows people to write off their Arkansas 529 contributions of up to $10,000 for married couples on their state income taxes."
How can foster parents start an account?
"A foster parent can visit our website, www.arkansas529.org, and go to the "Are You a Foster Parent?" landing page for additional details on how to get started. You can open an account on our website in just a few minutes or you can call our office at 501-682-1406 and we'll help you get started."