State College Tuition Savings Program To Be Among Nations Best

BATON ROUGE, LA – State Treasurer John Kennedy recently announced a new advertising campaign to promote the state’s college tuition savings program. He also discussed proposed legislation for the program that will make it one of the most innovative state-sponsored college investment programs in the country.

The program, known as START the Student Tuition Assistance and Revenue Trust works much like a savings account. Parents or grandparents make deposits into the START fund. Investment professionals in the State Treasury then invest the money to earn the highest rate of interest possible consistent with safety of principal – at no cost to the investor – with all money going to pay for the child or grandchild’s college education.

All monies must be used to pay for post-secondary education at any eligible university, community college, state technical college or vocational institute. START deposits are eligible for matching dollars from the state, and earnings grow free of state income tax. Federal income taxes are deferred until the money is withdrawn.

Its important that we do what we can to improve the level and quality of education for our children. Making provisions to pay for the costs of higher education is a necessary step. I hope that parents and grandparents will begin investing in their children and grand children’s future today, said Kennedy.

Jack Guinn, director of the Office of Student Financial Assistance, which manages the START program as well as other state college finance programs, said many families have not heard of START because of the recent overshadowing by TOPS, the state’s tuition scholarship program.

However, TOPS will not cover all the costs. Students are still expected to pay for their books, supplies, equipment and room and board. These often unanticipated costs can prove burdensome, Guinn said. Investing in START can be an effective way to meet these costs.

Kennedy said the new advertising campaign consists of three 30-second television commercials, three 30-second public service announcements for radio broadcast, and an outdoor billboard design. The ads are currently airing in the major media markets throughout the state, while Lamar Advertising has donated billboard space for the outdoor design.

The ads feature a grandfather who is investing in START for his grandson, a mother who is concerned about meeting expenses not covered by TOPS, and a young boy who wants to go to school to be an engineer. Each promotes START as a great way to save for the costs of a college education.

We hope this campaign will introduce START to many parents and grandparents who are looking for a smart and safe way to invest for their children and grand children’s college education, said Kennedy.

The START program is unique among other state-sponsored college investment programs in that it allows account holders to earn matching funds from the state. The matching funds are called Tuition Assistance Grants and are awarded based on the adjusted gross income of the person(s) who opens the account.

Currently, the matching grants are awarded as follows: 14 percent state match for families with incomes less than $15,000; 12 percent for incomes between $15,000 and $29,999; 10 percent for incomes between $30,000 and $44,999; 8 percent for incomes between $45,000 and $59,999; 6 percent for incomes between $60,000 and $74,999; and 4 percent for incomes between $75,000 and $99,999.

However, Kennedy said the State Legislature recently passed legislation, effective Jan. 1, 2001, to increase the levels of income eligible for the highest percentage of matching funds.

The new legislation allows families with incomes up to $29,999 to receive a 14 percent match; between $30,000 and $44,999 to receive a 12 percent match; and between $45,000 and $59,999 to receive a 9 percent match. Income levels between $60,000 and $99,999 will remain at the current percentage level for matching funds, while persons with incomes above $100,000 will be eligible for a 2 percent matching grant.

The new legislation also allows for investors to deduct up to $2,400 per account in START contributions from gross income reportable to the state for tax purposes. The tax deduction is in addition to the programs state tax exempt status and deferred federal tax status on earnings.

The lead legislative author of the enhanced START legislation is Sen. Jerry Thomas, R-Franklinton. The bill awaits the governors signature to become law on January 1, 2001.

Persons interested in receiving more information about the START program can contact State Treasurer Kennedy’s office at P. O. Box 44154, Baton Rouge, Louisiana, 70804, or by phone, 225-342-0010, or call the Office of Student Financial Assistance at 1-800-259-5626, extension 1012, or visit the START website on the Internet at www.osfa.state.la.us.