(Memphis) Face it, the price of college has been rising every year and by the time a child born this year hits a college campus, it could cost parents a small fortune.
“There are a lot of issues on why Tennessee is behind the national average in college attendance and college graduation, but affordability and access is at the heart fo those issues,” says Tennessee Governor Bill Haslam.
It’s why he is introducing the Tennessee Stars College Savings 529 Program.
It replaces the Path2College 529 that Tennessee started with Georgia about four 4 years ago.
TNStars will give parents more investment options with less administrative costs.
Let’s say your child is born in 2012, putting in $100 a month at 5-percent yearly interest for 18 years, will give you $34,602 dollars towards college.
You would have earned $13,000 above what you put in.
Even if you are a late starter and your child is say 12 years old, you have 6 years to invest, and will still have $8,366 dollars for their college needs
The earlier you save, the more you make.
Depending on how much you want to invest and at what risk, the earnings could be even greater.
TNStars is open to everyone parents, grandparents, aunts, uncles and friends regardless of income.
The returns are tax-free as long as they are used for approved expenses like tuition, books and housing.
The money can be used for public or private schools, in or out-of-state, and technology centers.
For more on the TNStars go to www.TNStars.com .