FAIRBANKS — The University of Alaska College Savings Plan is now part of a national campaign targeting student debt by educating families about 529 savings plans.
The “For Their Future Movement” launched in a partnership with Fred Rogers Productions on Monday as a campaign to inform families about how setting up a plan and saving over time can benefit future education.
“We’ve been trying to address the issue of student debt for so many years. We’ve been trying to push 529 as a solution for that for so many years,” said Lael Oldmixon, director of the UA College Savings Plan.
The UA College Savings Plan is part of a national organization called the College Savings Plan Network which, according to Oldmixon, has been working on this campaign for around 15 years. It is the first awareness campaign of its kind.
“We joined 26 other states and Washington, D.C., to kind of tackle and address this issue of student debt,” Oldmixon said. “Alaska families in particular, I hear ‘I want to go to college, but I don’t want to take out any loans. How do I do that?’”
The goal with a 529 plan is to save smaller amounts over time. Oldmixon added that the UA College Savings Plan has an entry point of $25 per month through automatic monthly contributions from a bank or payroll deduction or a one time contribution minimum of $250.
Part of the national awareness campaign involves airing advertisements before and after episodes of “Daniel Tiger’s Neighborhood” on PBS.
The College Savings Plan Network worked with a marketing agency to find a partner on the campaign who shared educational values. They found Fred Rogers Productions, which produces “Daniel Tiger’s Neighborhood.”
Fred Rogers Productions, founded by the man known for his “Mister Rogers’ Neighborhood,” was inspiring, according to Oldmixon, because the company promotes achieving lifelong goals and access to education across various demographics.
“(Fred Rogers Productions) suggested Daniel Tiger as a good avenue for us because Daniel Tiger reaches so many people in the United States,” Oldmixon said.
The idea is that parents will be watching “Daniel Tiger’s Neighborhood” with their children and the ads will be able to engage with families to let them know about setting up a 529 plan. That way, parents and children can learn about the plans and start thinking about future education early on.
“It is a tax-advantaged way for individuals to invest and save for future education,” Oldmixon said.
There are three 529 plans in Alaska: the T. Rowe Price College Savings Plan, the John Hancock Freedom 529 and the UA College Savings Plan. The plans are sponsored by states or educational institutions, and, according to the U.S. Securities and Exchange Commission’s website, they take two forms: a prepaid tuition plan or an education savings plan.
With a prepaid tuition plan, people can buy credits for future tuition and fees. An education savings plan opens an investment account to save for future expenses such as tuition and fees, software, classroom materials and room and board.
“We started out as a prepaid tuition program, then in 2001 we converted to the education savings plan,” Oldmixon said.
The UA College Savings Plan converted because of the flexibility of the education savings plan, according to Oldmixon, that way the money invested through the plan could go to a number of educational costs.
Since 2013, Oldmixon said the number of unique account holders has grown to about 30,000. Unique account holders are individuals who hold one or more accounts with the plan. For example, a parent might be one unique account holder, with three accounts for three children. There are approximately 40,000 funded accounts open with these 30,000 account holders.
The plan had under 7,000 accounts when it was converted in 2001 to a different plan.
Many account holders choose to fund their account through half of their yearly PFD.
“We have approximately 14,000 Alaska residents who used the PFD to fund their accounts in 2018,” Oldmixon said. She added that the number of people who use this method grows at a steady 1-2 percent each year.
In addition to the advertisements, the UA College Savings Plan will be involved in marketing and social media campaigns. The hashtag #529ForTheirFuture is being used across social media platforms to raise awareness for the plans.
“We want people to know that these should be — the intent is for them to be — able to be accessible to the masses,” Oldmixon said.