ScholarShare 529 College Savings Plan

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It’s never too early to start saving for college

Jun 06, 2018

With tuition rates spiraling rapidly upward, it’s more vital than ever that Californian families start saving early for college.

Student loan debt has now reached $1.5 trillion nationally, up from $676 billion in 2008, according to the Federal Reserve Bank of New York. And, over the past decade, tuition rates at the University of California, California State University and California Community College have increased 100 percent, 117 percent and 130 percent, respectively.

When Americans are burdened with student loan debt, they are not able to buy homes, cars and other products that boost our economy. The good news, however, is that the contributions families make today can pay off later in the form of increased earning potential for their children, because college graduates earn an average of $1 million more than high school graduates during their career.

That’s why a ScholarShare 529 College Savings Plan is such a powerful tool for California families who want to start saving now for their children’s college education. It offers a diverse range of investment options, tax-deferred growth and withdrawals free from state and federal taxes.

Graduating with Zero Debt

Families that start saving early are reaping the rewards. Take the Maldonado family. Martha Maldonado opened a ScholarShare 529 account when the program launched, in 1999, and when her daughter, Julia, was just 2 years old. Today, Julia is a senior in college and Martha is close to her goal of seeing her daughter graduate from college with zero student loan debt.

“By putting a little bit away at a time, it helped lessen the burden of having to pay for college all at once,” said Martha. “At first, I was nervous about a ScholarShare 529 account but with patience and the compound interest, I was quite surprised at how the little bit I put away each month has gone such a long way.”

The Maldonados started off with $25 in their account and watched it grow from there, as Martha regularly set aside a small amount from her monthly paycheck.

“ScholarShare 529 has really helped make the college years manageable,” she said. “Paying for things with ScholarShare 529 is so easy. Even for small things, like a $10 or $20 book purchase, we just pull from the 529 account. It’s an investment in your child’s future. Why wouldn’t you want to do that for them?”

A Strong Foundation

As a child, Helen Lu was taught that a good building needs a good foundation—and a good future needs a good education. As an adult, she is putting those words into action.

That’s why she opened ScholarShare 529 accounts for her daughter and son when they were born. Her daughter Emily is now 18 years old and will be attending Berkeley in the fall, and her son Ivan is 12.

“I strongly believe in going to college and I’m one of those people who likes to plan ahead,” said Lu, who is the principal at Frank Vessels Elementary School in Cypress, CA. “I knew by the time my kids went to college, it was going to be a huge amount of money. So every month I set aside $200 for each child in their 529 accounts.”

Today, Lu is closing in on her ultimate goal: paying for her children’s college education in full. But she’s not the only one saving. Her children are also contributing to their own savings accounts. It’s part of teaching them financial literacy. They’re required to put away 50 percent of any money they earn or receive into their savings.

“Any money they get for Chinese New Year or for their birthdays, they can spend half and they have to save half,” said Lu. “I always wanted to make sure that my kids are ready for the future and have a solid foundation—and their 529 accounts are the core of that foundation.”

Saving for Triplets

Tim and Lorie Shelley knew they would have to prepare early for their children’s college education — they have triplets. The Sacramento-based couple started saving for college with ScholarShare 529 soon after their kids were born. They credit the early start and the ease of savings via monthly payroll deductions as a huge help in their quest to send three children off to college at the same time.

Today, their kids, Callahan, Maile and Jared are college freshman — and all made the dean’s list.

“ScholarShare 529 played a big part in making that happen,” said Lorie. “By taking advantage of the automatic payroll deductions, we’ve been able to guarantee that some portion of our income would be automatically saved for college.”

Adds Tim, “The biggest piece of advice I have for parents of twins or triplets is to start as soon as possible. Just like it’s smart to start saving for retirement as soon as you get your first job, you need to start saving for college as soon as your children are born.”


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