Saving For College: Learn About ScholarShare California’s 529 Savings Plan

Have you thought about saving for your kids for college?

No matter how young or old they are, the time to start thinking about it is NOW! When I went to college, my mother did not know about 529 college savings plans. Her, my sister and I were forced to take out loans that took what seemed like forever to pay off. ¬†I have been thinking about getting started with a savings plan for my two kids, but like many moms, I had no idea where to even start. As much as I would love for them to be able to get scholarships and grants, none of which are guaranteed, my husband and I still need to have something in place. Here’s why:


  • Between 1985-2005, tuition has risen 439 percent.¬†[Source: Bureau of Labor Statistics Report]. Can you even imagine what it might be in 10-15 years?
  • The average college student in 2011 had a staggering average debt of $22,900 and the average cumulative debt has increased by 5.6% or $1,139 a year since 2003-04. ¬†[Source: Mark Kantrowicz,]
  • I want to make sure my children are able to attend college without any barriers or huge amounts of debt. We are a middle class family, so we’re not overflowing with money. We need security.
  • Statistics show that median earnings (income) for a worker with a bachelor‚Äôs degree were over 60 percent higher than median earnings for a worker with a high school diploma alone.
  • There are benefits to planning early.¬†Parents who have been saving more than 10 years have set aside an average of $25,193. That compares to $14,733 for those saving 6-10 years and $4,663 for those saving five years or less. [Source: Hart Research Associates]
  • Peace of mind.


I was able to attend a dine and learn event with ScholareShare, California’s 529 College Savings Plan, and I learned soooo much! We enjoyed dinner at Searsucker in Downtown, San Diego and chatted the night away with folks from the ScholarShare program, the county treasurers office, TIAA-CREF financing, and fellow San Diego blogging moms. I totally understand how overwhelming it can be to try to fathom how to save for higher education costs. Trust me, most of us in the room were beginners. There are a ton of reasons to choose a 529 savings plan with the state of¬†California¬†rather than trying to save on your own.



What are the benefits of having a California 529 College Savings Plan?

Tax Advantages
Contributions and Any Earnings Used to Pay for Qualified Higher Education Expenses are Federal and California Income Tax-free. Also, contributions to ScholarShare may reduce the taxable value of your estate.

Flexible Features
Anyone May Open an Account. Parents, grandparents, relatives and friends can contribute to a ScholarShare account. Whether your beneficiary decides to go to a private or public college or university, in-state or out-of-state, trade or graduate school, funds in the account may be used at any eligible higher educational institution in the nation and many abroad. You can use the funds for tuition, mandatory fees, books, supplies, equipment, and more.

Choice of Investment Portfolios
ScholarShare offers a choice of 19¬†Investment Portfolios¬†so you can choose a portfolio or a combination of portfolios that best suit your needs. There is a low minimum initial contribution of only $25 and a maximum account contribution of $350,000, and there are no income limitations. If your child named on the account doesn’t attend college for any reason, you can transfer the funds to another beneficiary in the family or¬†withdraw¬†the funds for any use for a fee.

Low Plan Fees and Easy Account Access
With ScholarShare there are no sales charges, start-up or maintenance fees. The State of California selected TIAA-CREF Tuition Financing, Inc. to serve as plan manager for ScholarShare, so there is an annual asset-based management fee to cover the cost of investment management and administrative services. The estimated underlying fund expenses range from 0.18 to 0.62%. Access your account anytime online, many transactions can be performed online as well. You can also speak to a college savings plan expert during business hours. Also to note, you’ll save on fees by going thought ScholarShare directly, cutting out the middle man (banks and financial¬†advisers).


Recap: Simply put, here’s what you can expect…

There is an initial minimum contribution of $25 to open an account. From there, you can set up an automated contribution plan where funds are electronically added monthly, set up a payroll deduction or of your monthly check, or do manual transfers. There is a small annual management fee to cover administrative costs.

The money is saved in an interest accruing account with the State of California. It is placed in one of the 19 ScholarShare investment portfolios and gains momentum over the years as you add to the account. Once it’s time for your child to enroll in college, you’ll request a withdraw. It can be used at any eligible institution nationwide without any¬†withdraw¬†fees! This includes¬†public and private colleges and universities, graduate and post-graduate schools, community colleges, and certain proprietary and vocational schools.

If your child gets a scholarship, funds can be withdrawn and used for anything. In the case of death, disability, or if your child decides not to attend college, you can still use the money you’ve saved for anything you want. Roll it over to another child’s 529 account at no cost, or spend the money as you please. There is just an additional withdraw tax penalty of 10% when you do.

This is the easy part! Visit to enroll online, or have an enrollment kit mailed to you.


Do not be one of the many parents who think their kids will get a scholarship, who fail to plan for their children and who find themselves unprepared. Know your options. Knock out one of your biggest parenting fears and learn about the¬†ScholarShare 529 College Savings Plan. Knowledge is power! Not only for us, but for our kids’ futures as well. As with all financial decisions, you should be informed and speak to your financial and tax advisors to learn what’s best for you. Best of luck!


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Disclosure: I received this information from One2One Newtork and ScholareShare, I was compensated for my efforts. All opinions are my own and I am looking to start accounts for both of my children.



  • What a great article on the 529 plan. I’ve been wanting to write an article about it myself, but it’s pretty complex. Instead I’ve put together a small list of good sources, this article included, for my blog post. That way I can direct readers to the more informed sources. It’s important that they know this option is available to them, after all. Would it be okay for me to use your infographic in my article as well, with proper attribution, of course?

  • My husband and I are weighing different options for the kids’ college fund. We have a friend who’s children decided to not attend school and one child got a full ride. They have a substantial amount of money tied up in the 529 is the 10% penalty their only concern and is the 10% applied to the total or the earning within the 529?

  • wow that sounds great! most 529’s if the child does not go to school u are either stuck with it or you yourself or another family member can use it….but you can’t withdraw funds for anything u wish. The fact that you arent’ stuck with the money in the event of schlorship or whatever would make me sign up if i were in california!

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