TNStars® 529 College Savings Program is pleased to announce the success of the first qualifying period for Tennessee Investments Preparing Scholars Program (TIPS). Introduced in September 2014, TIPS provides a 4-to-1 matching contribution for middle to lower income families who have set aside money in their child's college savings account. TIPS applicants had from October through June 30, 2015 to open a new account and to save for the match. During the initial nine-month qualifying period, new TNStars® accounts were opened for 163 Tennessee children from families with an average household income of $33,196.14 per year thanks to the TIPS program.
The new qualifying period is set to begin August 1, 2015 and to end June 30, 2016. To qualify for the TIPS matching grant program, the family's household Adjusted Gross Income must be less than 250% of the federal poverty level. With TIPS, if a qualifying family opens a TNStars® account and contributes just $25, the Tennessee Treasury Department will put $100 in an account for the designated child. If the family saves a total of $125 in the account by the initial qualifying period, Treasury will contribute $500. For the first qualifying period, the average family contribution was $347 per account, and 140 accounts received the full $500 matching contribution.
TNStars® and TIPS are programs of the Tennessee Treasury Department, under the leadership of State Treasurer David H. Lillard, Jr. The TIPS program was introduced to help encourage those who have traditionally not taken advantage of 529 College Savings accounts to receive tax-free earnings on savings for their children's higher education expenses.
"Today there are 163 children who, without the financial means, may not have attended college. I am excited to know these children now have a head start on lessening the financial burden and increasing the probability that they will continue their education," said Treasurer Lillard. "The goal was to start the conversation with families of all means on the importance of saving early for expenses associated with post-secondary education. We hope to see the number of families taking advantage of this great program double to triple in the next year."
Families may apply for the TIPS program for up to three years, meaning they could receive up to a $1,500 lifetime benefit per child. Families will need to apply for TIPS each year to receive the matching contribution. Treasury encourages more families to apply to take advantage of the program and the increased earnings available by starting college savings early. The TIPS program is available to the first 2,000 applicants who qualify.