NASHVILLE - Tennessee Gov. Bill Haslam and Treasurer David Lillard announced Tuesday the creation of what they say is a new, easy way to help parents and students save for college.
The "Tennessee Stars College Savings 529 Program" is intended to provide a low-cost way for families to save for increasingly expensive higher education expenses. It will replace a current state-sponsored program that Haslam said is "piggy backing" on Georgia's program.
"That didn't seem right," Haslam said at a news conference in which he credited Lillard for coming up with Tennessee's own program for college savings.
Under the program, Tennessee families can open tax-advantaged accounts with the state with 14 different investment options as well as an age-based option in which they make regular contributions.
Organized under Section 529 of the Internal Revenue Service Code, families can save money free of federal taxes provided the money is eventually spent on items like higher education expenses like tuition and textbooks.
Tennesseans who open accounts with at least $50 will receive a one-time $50 match from the state. Those who "roll over" their balances from other 529 college savings plans will get a one-time match of $100. That includes the state's pre-paid plan.
The state partnered with Georgia several years ago to start a college savings plan. But Lillard told parents and children attending today's event that "this program's for you."
Haslam called the plan a "great opportunity for Tennesseans who want to attend college."