Your Boss May Help You Save for College
Some employers allow payroll deduction into 529 plans.
As the price of a college degree rises and student-loan debt balloons, employers are adding education-related perks to their benefits packages. One that is gaining traction: payroll deduction to contribute to a 529 college-savings plan. Nationwide, 11% of employers surveyed offered the benefit in 2018, nearly double the percentage in 2014, according to the Society for Human Resource Management (SHRM).
In California, payroll deduction for the state’s ScholarShare plan is available through nearly 1,000 employers—and the number of employers signing up to offer ScholarShare doubled in 2018 compared with 2017. A small number of companies also provide matching contributions to a 529, similar to those commonly offered for 401(k) plans.
By having your employer carve out a contribution from your paycheck, you can dedicate money to college savings before you have a chance to spend it. And employers may provide extra help. With the California plan, for example, ScholarShare staff visit participating companies to educate employees and assist in opening accounts, says Julio Martinez, executive director of the ScholarShare Investment Board.