Take a look at some of the top reasons 529 Plans are the true hidden gems of saving for college and other higher education.
Merriam-Webster defines value as, “relative worth, utility or importance.” So when I talk about bringing value back to 529 College Savings Accounts, this is what I’m referencing - renewing their worth, utility and importance. But why 529 Plans? What’s so special about them? Having worked in community advocacy my entire career, these plans are the best resources I’ve found that are accessible to most anyone (more on that later), and have the potential to provide debt-free higher education. So for something that seems to have a high value, why doesn’t it? There are two main reasons.
Reason #1: Lack of awareness. About 4% of people in the US are familiar with 529 College Savings Accounts. So if you’re reading this article, and you don’t know what I’m talking about, don’t feel left out. One of the things we’re doing at Sootchy is to increase awareness so more people value these accounts.
Basically a 529 College Savings Account, aka 529 Account or 529 Plan, is a type of savings account that’s specifically designed for higher education. But don’t get it twisted - that doesn’t just mean college. You can also use these accounts to pay for trade schools, art institutes, culinary schools, two-year colleges and even K-12 private schools (tuition only). And here’s the best part. When you put money in these accounts, it gets invested and any growth on the account adds up without getting taxed federally or at the state level. Your account can earn money and you don’t pay taxes on it. So after telling people what they are, we come to the second thing keeping folks from valuing them.
Reason #2: Lack of access. Remember when I said, “accessible to most anyone.” Well, back in the day, even if you heard of a 529 College Savings Account and looked into setting one up, you probably got a stack of paperwork and a bunch of investment information that might make your head spin. And that’s cool if you’re into filling out paperwork and are confident deciding on your asset allocation, but what about everyone else? Well, that’s the other way we’re trying to add value (back to that “utility” part of the definition): easy access. When we created our app, we knew that people needed a way to get through all these forms that wasn’t complicated. So we take you through the process step-by-step with simple instructions and intuitive technology. We want to make it easy for everyone to use these accounts to save for education - so much value!
Some other ways we want to bring value back to 529 College Savings Accounts have to do with financial literacy and corporate responsibility. These are more closely tied to the “importance” part of how we define value. They focus on the way we work to create a better world with 529 Plans and the Sootchy app.
In addition to helping people save for higher education, opening a 529 Account with Sootchy has the wraparound benefit of also increasing financial literacy. We understand that these are all big decisions and no one should feel alone in making these choices. Through the Resources tab on our website, blog articles and social media posts, Sootchy helps people to make informed and educated decisions about their financial resources - particularly resources like 529 Plans. We want people to not only achieve debt-free education, but to also learn more about the basics of finance.
The last way we add value to 529 Accounts is probably the one that’s most important (in my humble opinion). It’s corporate responsibility. And this is not just some slogan we paste on our business proposals or ads. It’s the primary reason I decided to join this company. Sootchy is taking our cue from Migos to walk it like we talk it. Most corporations are driven by profit, but instead we research how we can make the most effective impact on underserved communities. We’re a platform that stands for debt-free education for all. And that means all. By making 529 Plans more accessible, we’re more likely to make higher education a reality for everyone. And that's how we see long-term strides in Black, Hispanic and other underserved communities; having resources like college or a trade school without the debt.