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IMPORTANT NOTICE
The LoneStar 529 Plan is established and maintained by the Texas Prepaid Higher Education Tuition Board. The Texas Sunset Advisory Commission performs periodic reviews of most state agencies. The Commission is currently reviewing the mission and performance of the Board. For information on how to provide comments or suggestions to Sunset staff on the Board’s mission, operations or services, please click here.

Today, the average cost of a four-year undergraduate education at a public university is over $90,000; more than $180,000 at a private college.1

That’s a daunting amount for any family, but if you start saving when your child is a baby, you can take advantage of the remarkable power of compounding savings and interest for a longer period of time.

Starting with $5,000, you can see how 529 plan contributions grow when you continue with $100 per month until your child turns 18.

Chart illustrating the benefits investing early. The hypothetical example depicts the growth of a $5,000 initial investment and subsequent $100 monthly contributions until a child turns 18 with a 5% rate of return. An investment started when a child is born may grow to $46,699. An investment started when a child is 5 years old may grow to $31,255. An investment started when a child is 10 years old may grow to $19,154.

This chart assumes a $5,000 lump sum investment, $100 monthly investments and 5% annual rate of return. The calculations are for illustrative purposes only, and the results are not indicative of the performance of any investments. The calculations do not reflect any plan fees or charges that may apply. If such fees or charges were taken into account, returns would have been lower. With any long-term investment, investment return may vary. Such automatic investment plans do not assure a profit or protect against losses in declining markets. Before investing, investors should evaluate their long-term financial ability to participate in such a plan.

1. Source of chart data: The College Board, “Trends in College Pricing,” 2011. Average college costs include tuition, fees, books and supplies, room and board, transportation and other expenses, as well as the assumed 5% annual rate of increase.