Connecticut – Saving For College in 2024
As parents, grandparents and students, we know college is coming and that we're somehow going to have to pay for it someday. Fortunately, we have many options available to us, including savings bonds, the stock market and 529 plans. Starting a 529 account now is always the best option, no matter how old you (or your child) is. While playing the stock market may yield higher returns on your investment, placing your money into a 529 plan allows it to grow in a tax-free environment. One study even found that when the federal tax benefits were taken into consideration, 529 plans outperformed their benchmarks in every category.
Connecticut has its own state-operated 529 plan called Connecticut Higher Education Trust. It is important to note that your child does not have to go to a CT college or university to use this savings account. 529 plan funds can be used at any accredited college or university across the nation, including some K-12 private schools!
Connecticut College Costs & Trends
Colleges and universities across the United States experienced increased operating costs of 2.5% in 2019. This most recent inflation figure was down slightly from the 2.9 percent increase in 2018 and 3.4 percent increase in 2017. These costs are forwarded directly to students in the form of higher tuition and living expenses. As these costs steadily rise every year, parents are investigating how to help offset these future higher education costs.
These rising costs are hitting closer to home in Connecticut as well. Connecticut's higher education costs rose by 36.9% in just the last 10 years, ranking as the 25th highest state.
The table below shows the average one-year costs last year (2023) for different types of Connecticut colleges and universities.
| Ownership | Degree | Schools | Public Out-of-State Tuition | Public In-State Tuition | Median Debt | Total Annual In-State Cost |
|---|---|---|---|---|---|---|
| Private | 2 year | 30 | $17,220 | $17,220 | $10,262 | $18,812 |
| Private | 4 year | 21 | $34,446 | $34,446 | $24,974 | $26,435 |
| Public | 2 year | 15 | $12,865 | $4,313 | $6,962 | $6,388 |
| Public | 4 year | 7 | $23,373 | $10,827 | $22,159 | $18,526 |
These costs rise every year. Rising tuition is a major driver of these increased higher education costs. Tuition at a 4-year university in CT rose 28% (ranked 3rd in the US), while a 2-year or trade school increased their tuition by 17 percent.
529 Tax Benefits for Connecticut Residents
Connecticut offers tax benefits and deductions when savings are put into your child's 529 savings plan.
| For single filers: | $5,000/yr |
|---|---|
| For joint filers: | $10,000/yr |
Best 529 Plans in Connecticut
Connecticut offers a direct-sold 529 college savings plan without residency restrictions, managed by TIAA-CREF, and an advisor-sold 529 savings program that is open only to Connecticut residents, managed by Hartford Life.
| State Plan Name: | Connecticut Higher Education Trust |
|---|---|
| Minimum Contribution: | $25 |
| Maximum Contribution: | up to $300,000 across accounts for a single beneficiary |
| Fees: | There are no maintenance fees, but you will pay an asset management and administrative fee anywhere between 0.01% to 0.12%, depending on your elections. |
Connecticut 529 Plan Statistics
There are 157,011 registered schools in Connecticut with a total value of $3,981,092,272. That is an average of $25,355 per account. Unfortunately, 529 plans are not widely used... a 2018 study by Edward Jones found that only 29 percent of Americans were even aware that 529 savings plans exist!