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FAQ – The Oregon College Savings Plan

What are the benefits to savings versus borrowing?

When it comes to how you pay for school, as much as possible, it’s better to save now than borrow later. When you’re saving, interest can work for you. When you’re borrowing, interest can work against you. In the same way that compounding interest over a long period of time can significantly increase your savings, repaying interest on a loan over a long period of time can significantly increase your debt.

Since interest rates for loans tend to be higher than interest rates for investments, the cost can be staggering. Depending upon the interest rate and repayment terms, you can pay as much or more in interest than the original loan itself. When you add in the fact that student loans are notoriously difficult to pay with most entry-level salaries and the impact they can make on an individual’s lifetime wealth, saving more now just makes smart financial sense.

This chart hypothetically assumes four years of college (current annual cost of $20,000) for a child born today. To meet that expense 18 years from now, you would need to save $448 per month (from birth) in a 529 plan — totaling $207,456; $113,000 in contributions and $94,456 in earnings, assuming a conservative 5 percent college cost inflation rate and a 6 percent annual investment return. If the same funds were borrowed to pay for college rather than saving and investing your child would graduate owing about $276,383 in loans. This translates into a monthly payment of approximately $2,303 over 10 years, assuming a 6 percent loan interest rate. In other words, college would end up costing an additional $163,383, or more than double in out-of-pocket costs, than if you had saved and invested in advance.


Must I use my Oregon College Savings Plan account at an Oregon college or university?

No. The money in your account may be used at any eligible educational institution nationwide. Any school that qualifies for federal financial aid qualifies for the use of 529 funds. This includes public and private colleges and universities, graduate and post-graduate schools, community colleges, and certain technical and vocational schools.


Can I use my Oregon College Savings Plan account to repay past student loans?

No. 529 funds must be withdrawn in the same calendar year in which the qualified expense was incurred.  


How soon can I use the funds in my Oregon College Savings Plan account?

There is no minimum time requirement, just long enough for any recently contributed funds to clear the 10-day hold.


If I don’t use all the money in my Oregon College Savings Plan account, can I give it to someone else?

Yes, you can designate a new beneficiary. However, the new beneficiary must be an eligible member of the original beneficiary’s family, such as a spouse, sibling, cousin, aunt, uncle, parent, or the beneficiary’s own child.


Can I sign up for payroll deduction?

If you wish to have contributions automatically taken from your paycheck you’ll first need to check with your employer for program availability.


What investments are available in the Oregon College Savings Plan?

Though the end goal is the same — to help pay for college — everyone’s investment strategy may not be the same and can even differ greatly based on unique circumstances, financial constraints, timelines, and overall savings goals. If you’re an experienced investor, you might choose a multi-fund option you’ll review and change periodically. If you or your child will be needing the money to pay for college expenses soon, a principal protected investment might be the best choice.

The best place to start is to visit the investments page on the Oregon College Savings Plan website. From there, you can call 866-772-8464 to speak with a college savings specialists who is knowledgeable about all the Plan’s investment portfolios.

Consider the investment objectives, risks, charges and expenses before investing in the Oregon College Savings Plan. Please visit for a Plan Disclosure Booklet with this and more information. Read it carefully. Investments in the Plan are neither insured nor guaranteed and there is the risk of investment loss.

TIAA-CREF Tuition Financing, Inc., Plan Manager. TIAA-CREF Individual & Institutional Services, LLC, member FINRA, distributor and underwriter for the Oregon College Savings Plan.


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