Managing to save even a small contribution each month is a far better plan than borrowing all of what you'll need when the time comes.

Consider these hypothetical scenarios:

Scenario 1: Terry's parents start investing $100 a month into a 529 plan account right after Terry's birth. In 18 years (assuming a 5% annual rate of return), they could potentially save more than $35,000.1

Scenario 2: After exhausting federal student aid options, Terry has to borrow $35,000 to attend college. Based on a private student loan rate of 7.0 percent, Terry could be faced with a monthly payment of $406 for 10 years (or $48,720).2


A college education is worth more than ever.

College graduates earn as much as 65 percent more than the typical high school graduate over 40 years.3


1A plan of regular investment cannot ensure a profit or protect against a loss in a declining market.

2This hypothetical example is for illustrative purposes only and assumes no distributions made during the period shown. It does not represent an actual investment in any particular 529 plan and does not reflect the effect of fees and expenses. Your actual investment return may be higher or lower than that shown. The loan repayment terms are also hypothetical.

3College Board: Trends in College Pricing, 2013.