The average cost for a full-time student in South Dakota’s public universities after tuition, fees, room and board can be close to $12,000 each year. To help students cover these costs, we encourage you to begin saving now and understand the various forms of financial assistance that are available to you.
South Dakota 529 Plan
Information about the South Dakota 529 Plans that are available can be found by following the link above, but in general 529 plans are named after the section of the Internal Revenue Code that created them. These plans are designed specifically to save for college, offering various tax benefits and other important features. Generally, the person who is funding the plan opens the account (account owner), designating an individual (beneficiary) for whom the funds will be used.
Key Benefits of 529 Plans
You can generally enroll in any 529 plan regardless of where you or the beneficiary (student) reside in the United States.
Your Designated Beneficiary (student) can attend any eligible school in the country and even some schools abroad
- There are a variety of Tax Advantages for investing in a 529 Plan. Some of these tax advantages include tax-deferred growth, state tax advantages, and gift tax benefits.
Enjoy Favorable Financial Aid Treatment
While most savings and investments reduce a student’s eligibility for need-based financial aid, 529 savings plans generally receive more favorable financial aid treatment. That is because they are considered assets of the account owner, not the beneficiary. According to the federal financial aid formula, about 6% of parental assets, in contrast to 20% of students assets, are expected to be used toward a student’s college expenses.
Financial Aid Opportunities
Many South Dakota students can get financial aid, federal grants and/or loans to meet the costs of their education, in addition to numerous scholarships and awards available at every post-secondary educational institution in the state. A public university freshman with maximum need for financial assistance can receive as much as:
$ 5,550 Federal Pell Grant
$ 800 Federal Supplemental Educational Opportunity Grant (highest public university)
$ 2,000 Federal Perkins Loan (highest public university)
$ 3,500 Federal Subsidized Student Loan (maximum allowed)
$ 2,000 Federal Unsubsidized Federal Student Loan
$ 2,100 Federal Work Study (university average)
$15,950 Total potential funding available from federal sources
Awards could vary based on the student’s financial need, availability of Federal Student Aid funds, and university financial aid awarding policies.