MONTGOMERY, Ala. (WSFA) -- Gift shopping for kids is not always easy but the Alabama State Treasurer’s Office has a suggestion that it says will pay off in the long run.
Alabama State Treasurer John McMillan urges parents to invest in Alabama’s college savings plan called CollegeCounts 529.
The average student debt in Alabama is more than $31,000. The invested money can be used for colleges, universities, international and vocational schools, and even books, computers and living expenses.
The treasurer said account holders receive compound interest on what is invested into the account. There are more than 30 different investment options to choose from. The money will not be taxed when it is withdrawn for higher education expenses. There is also an Alabama state income tax deduction.
McMillan encourages parents, friends and grandparents to put money in the account as a holiday gift.
“Just look at it from a practical standpoint. If you give young people clothing or toys, they are going to outgrow them, or tear it up, or it becomes obsolete," he said. “But with this, it is something that will be there and continue to grow and they may not appreciate it as much at an early age as they would some kind of nicely-wrapped Christmas present, but down the road they’ll sure appreciate it.”
The state has 94,000 individual accounts associated with the program. Anthony Leigh and his wife opened an account for their daughter Carriemae when she was just 13 days old.
“My wife and I had very enriching college experiences and that’s something that we certainly want for her," said Leigh.
Leigh is the senior vice president for student and institutional development at Huntingdon College. His time as deputy state treasurer from 2003 to 2009 also showed him the importance of saving early.
“We just started when she was born and tried to put a little bit every month into it," he said. “It’s a great vehicle for grandparents, aunts and uncles when they want to make contributions to it.”
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