Apr 20, 2017 11:12 AM EDT
Student loan debt is a national problem with lots of graduates being burdened for years to repay it while making ends meet. However, one woman will be graduating this May with a double major and free from student loan debt. Here is the story of her journey.
Olivia Singletary will be graduating from the University of Maryland and College Park with a double major in May. She is excited about her future but most of all, she is facing it without any fear or burden of paying back her loans or her six-month grace period ending just like most of her friends are saying.
In her speech, she said that one of the reasons how she was able to do that was because her parents were frugal and wise enough to set aside money for her college fund while she was still young. She mentioned that unlike other parents who buy new toys or milkshakes for their kids, her parents were instead putting the money into her college fund. She also said that it is possible to have generationally debt-free students.
Her parents, on the other hand, thank the 529 plan, a tax-advantaged college saving plan that is sponsored b y the states, state agencies, or educational institutions. According to the U.S. Securities and Exchange Commissions, all fifty states including the District of Columbia offers at least a type of 529 plan.
Officially called as the qualified tuition plan, there are two types of 529 plan - college savings plan and pre-paid tuition plan. The college savings plan allows the saver to create an account for the student for the sole purpose of using that money to pay for tuition and other college expenses in the future. The pre-paid tuition, on the other hand, allows the saver to buy credits at colleges and universities who participate in the program for future tuition.
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