State program to help Arizona families with student debt
PHOENIX (3TV/CBS 5) — Nearly 17 million students are headed to college this fall, but unlike the last three years, starting Friday, federal student loans will once again accrue interest. Student loan debt is the second largest debt burden for people in the U.S., reaching an all-time high of nearly $1.77 trillion this year.
That’s why Arizona Treasurer Kimberley Yee and other politicians are pushing for more programs to help families save. “We have this wonderful program called the Arizona 529 education savings plan, and this plan came to our office just over 34 months ago,” Yee said.
Parents, grandparents and guardians can use the state-sponsored plan to save for their child’s college free of tax while earning interest. The money can be used at most public and private universities as well as trade schools, and it doesn’t affect eligibility for financial aid. “Let’s say you put $50 aside every month over the course of 18 years. At 6% interest, they have over $18,000 in the bank ready to go,” Yee said.
The money can also go toward other contributions. “We also allow for these expenses to go to K-12 private school education. If the money is not used entirely, it can roll over to an IRA starting in 2024,” Yee said.
Yee hopes this program will help provide more education opportunities for everyone. “We have also reached all corners of the state in communities where they may not thought of college before. So, it’s exciting to see that new families are coming in to put that small amount of money on the side that will grow over time,” she said.
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