The topic today is college savings. So many of you write-in asking,”Farnoosh, where should I save for my child’s college education? Is a 529 still the best option?” Some even want to know about how to save for our unborn children! I get it. College is expensive today, let alone 18 or 20 years from now.
To help us tackle college savings plans, we have the co-founder and COO of CollegeBacker Abby Chao joining us. Prior to launching the company, Abby was a senior associate and social sector fellow at McKinsey & Company.
What’s interesting is that only 30% of Americans know what a 529 plan is. That’s where CollegeBacker wants to help. It’s a new company that’s educating parents around it and make it easier for them to save up for their child’s college costs. Their trick: involving your community of friends and family. At CollegeBacker you can open a 529 plan and invite others to contribute.
Abby and I discuss 529 pros and cons of starting an account like this. It’s not a given that a 529 is the best way to save and that it’s a right fit for all families.
What if you save diligently into this account and your child doesn’t attend college or receives a full scholarship? What happens to the money? I was pretty surprised by some of the answers. There are also some potential legislative changes to the 529 this year that may or may not expand its impact. We talk about all of this, as well as Abby‘s own impressive career resume. Her “So Money” moment was when she was at work and convinced her bosses to give her a promotion and a raise…and reimbursements for graduate school!
CollegeBacker would like to offer So Money listeners a $25 match if you sign-up. You can visit collegebacker.com/somoney for more information.