College investing plan is doing its part
When the phrase “first in the nation” is used, it’s usually a reference to New Hampshire’s presidential primary. But it can just as easily apply to the state’s college tuition savings plan - an overlooked jewel in the crown of the Granite State. This year marks the 10-year anniversary of the law that launched this program and I see it as a reason to celebrate. Outside of investment circles, few people know that New Hampshire had the first college savings plan in the country approved by the Internal Revenue Service. Since opening for business nine years ago, it has attracted parents from around the nation seeking to save for their children’s college education. New Hampshire’s “Unique College Investing Plan” remains one of the largest such funds in the country despite our state’s small size. It has helped parents both here and out-of-state save for college. In addition, a portion of the administration fee generated by the fund’s assets goes into a trust fund to provide scholarships to needy New Hampshire students attending New Hampshire colleges and universities. By being among the first and offering an attractive deal, New Hampshire has succeeded in claiming a significant share of the college savings market nationally. Our college savings plan is the third largest in the nation at $7.7 billion, and the majority of that money comes from investors outside New Hampshire. With a fund that size, we’ve also been able to distribute more than $17 million in scholarship money to more than a dozen institutions of higher education in New Hampshire, including Saint Anselm College, Daniel Webster College, the University of New Hampshire and all of our community colleges. It is doubly a success story - helping families save and helping make college more affordable by funding scholarships to deserving New Hampshire youth. I am proud to have been involved with this program as the original bill’s sponsor and as chairman of the College Tuition Savings Plan Advisory Committee for the past nine years. I leave the committee this year knowing Unique is going strong. Most recently, the Legislature approved some minor adjustments to the program to keep it consistent with federal tax law and competitive with the many other plans now operating in other states. As tuition costs rise, the Unique College Savings Plan is providing an important opportunity for parents and grandparents to set aside and grow an investment that will provide for their children’s future. They can invest directly through Fidelity Investments or via a second plan available through investment advisers. Parents and grandparents can contribute up to $12,000 per year or prepay up to five years or $60,000 (double that sum for a couple) without paying the federal gift tax. No income tax is collected on the contributions or their earnings if it is spent for higher education, such as tuition, books or room and board. If a child opts not to attend college, the money can be used to benefit another child. Our state treasurer, Catherine Provencher, is a trustee and a member of the New Hampshire College Tuition Savings Plan Advisory Committee. Information about the program is available on the state Treasury Department Web site, nh.gov/treasury. I encourage parents and grandparents to consider this option for their children and grandchildren. We say over and over again how important an educated workforce is to the future of New Hampshire. Maintaining the Unique College Investing Plan as a competitive investment choice is one way this Legislature shows we mean it. Sylvia Larsen of Concord is president of the New Hampshire Senate.