"Investing in his high school years was unexpected, but it is setting him up for the right college and career path much sooner. I think his grandmother would be very proud."- Tia Brown, mother of Fishburne cadet
529’s cover more than college
by STEVE ROSEN Tribune Content Agency Aug 26, 2022
Original article found: https://azdailysun.com/ap/business/529s-cover-more-than-college/article_0b727b39-883e-5b0f-a2fb-e698afd2ec43.html
Tia Brown was at wits’ end last fall as her son Parker struggled to adjust to eighth grade.
Parker was a good student, she said, but he didn’t like the larger class sizes at his middle school or how chaotic and noisy it was in classes, the hallways and common areas. Perhaps the most worrisome problem was that Parker couldn’t focus on the teacher or assignments and chose to act up instead.
“He’s a great kid… but it was just rough,” said Brown, a single parent residing in Christiansburg, Virginia, near Blacksburg.
Finally, Brown gave her 14-year-old an ultimatum to straighten up: a choice between virtual learning or military school.
He warmed to the idea of military school, but there remained one tall hurdle. How would the family afford tuition at his top choice, nearby and historic Fishburne Military School, which costs about $40,000 a year for tuition and fees?
Brown’s solution: She tapped a 529 college savings account that her late mother had created for Parker when he was born.
“If it hadn’t been for the 529, I wouldn’t be able to afford the tuition,” said Brown, an entrepreneur and part owner of a Budget Blinds franchise.
Brown said she was unaware that 529 accounts could be used for anything other than qualified college costs until a financial adviser brought it to her attention. The result: Parker started at Fishburne in January, and he “just loves it,” his mother said. His grades have improved, and so has his disposition. He is also involved in athletics and has moved up through the ranks.
Since Congress in 2018 approved expanding the usage of the tax-advantaged 529 funds to include paying for private primary and secondary education, more than $104 million has been used to cover K-12 tuition just in Virginia’s Invest529 program, said Mary Morris, the program’s chief executive.
With 529 plans, parents can withdraw up to $10,000 per year per beneficiary for tuition to cover public, private or religious K-12 education. Keep in mind this benefit covers tuition only. Of course, there are also long-term tax benefits with 529 accounts.
Despite a steady uptick, using 529 funds early remains a small percentage of total expenditures, said Mary Morris, chief executive of Virginia’s Invest529 program.
While many private and religious schools offer financial aid, most of the financial responsibility falls on parents, grandparents or other family members. In Brown’s case, the 529 funds covered a chunk of Fishburn’s tuition in Parker’s first semester, and the school also offers scholarships to help bridge the gap.
Her goal is to continue to tap the 529 account to pay for Parker’s tuition over the next four high school years while replenishing the account to save for potential higher-education costs.
Indeed, some financial advisers recommend that parents who can afford it set up a 529 plan just for K-12 qualified expenses while maintaining a separate account for college.
Whether it’s for a military academy or not, Brown recommends parents open 529s — or any other options — as early as possible to meet the financial demands of education. She believes Parker will be much better prepared for life now that he’s at Fishburne, which could lead to college scholarships down the road.
“Investing in his high school years was unexpected,” Brown said, “but is setting him up for the right college and career path much sooner. I think his grandmother would be very proud.”