As an employer that offers benefits, consider helping your employees find higher education savings. College tuition expenses are continuing to increase making it difficult for some families to send their children to college. Look at the following higher education savings tips that you can use to help your employees.

As a business owner you should be aware of the different options you can offer to your employees to help them save for college. The federal law offers two tax benefited savings accounts for families: an education savings account (ESA) and a 529 account. The ESA is a privately-managed account, while the 529 is a state-managed plan. Other advantages to creating a higher education savings plan include:

1. The higher education savings plan donor is in charge of the account.
2. The principal savings amount grow tax deferred, and when the money is used for college expenses are also tax exempt.
3. Higher education savings plans have low to zero start up costs and nearly anyone can open an account.
   

Action Steps
The best contacts and resources to help you get it done

Consider a Coverdell Higher Education Savings Account

A private brokerage will manage your employee's Coverdell higher education savings account, or ESA. There are some excellent benefits to saving for college with this kind of account--the disbursements are tax-deductible and any person, organization or corporation can contribute to the account. This account does have a maximum $2,000 per year contribution limit, however.

I recommend: Vanguard is a Coverdell higher education savings provider offering various investment options, including stocks and bonds. Your employees can manage their accounts by phone and online. Firstrade also offers ESA accounts. Your employees can easily apply online or via fax.

Help make higher education savings easier by recommending a 529

Though the 529 is a state-managed education savings plan designed to help families prepare for college expenses, it doesn't matter which state the account is opened in. If your business is in Vermont and your employees open California 529 accounts, they can use the money for any school they choose. Unlike the ESA, there isn't a maximum investment amount.

I recommend: The Kentucky Education Savings Plan Trust offers a payroll deduction program. Your employees can automatically deduct a certain amount of each paycheck to be deposited into the 529 savings account, making it easy for them to save for college. AmCheck offers nationwide 529 plans. Click on "Get a Quote" and receive higher education savings information within the hour.

Partner with a tuition reward program for higher education savings

Your business can partner with financial companies to provide tuition rewards to your employees. These financial companies in turn partner with participating colleges and universities. When your employees participate in a 401K or other investment plan, they can receive discounts at these participating schools.

I recommend: Partner with SAGE so your employees participating in an investment plan through your company can receive tuition discounts at the participating colleges. The College Tuition Benefit program (CTB) enables you to offer employees college scholarships.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Help your employees save for college and seek higher education savings advice based on their individual needs. You should consult a financial and or tax adviser for information and higher education savings tips that meet the needs of your employees.