529 plans offer benefits for college savers: the University of Alaska College Savings Plan is a 529 plan that delivers a full spectrum of exceptional benefits--whether your child chooses to attend a UA campus or almost any other college, university or technical school in the United States.

• Author: Frisk, Travis C.

When your friends complain about how much college costs, believe them.

In case they haven't mentioned it, a year of college costs about as much as a new car these days, a very nice car if we're talking about many of the colleges attended by Alaskans. The costs of a college education in Alaska are comparable to those elsewhere. College costs are rising faster than inflation, up 40 percent over the past decade.

Below are figures for annual college costs based on current figures for tuition, room, board and incidentals, as compared to what they are projected to be in 2015 (picture a 6-year-old)--at an 8 percent inflation rate. (The 2015 college costs were calculated using the University of Alaska College Savings Plan's College Investment Calculator. Costs within the calculator are formulated using the Monte Carlo Simulator.)

Most students will have to borrow some funds for college, but they and their families can reduce that amount through planned, and often tax-deferred, college savings accounts, including 529 plans and Coverdell Education Savings accounts (ESAs, formerly education IRAs). One of the more popular choices today is the 529 plan, an investment operated by individual states to help families save for college-related expenses. While the maximum you can contribute to 529 plans varies from $100,000 to $250,000, many allow you to start small, contributing as little as $25. You can open more than one account in a student's name, although the combined contributions cannot exceed the state maximum.

There are two types of 529 plans: a prepaid tuition plan and a savings plan. A 529 prepaid tuition plan allows a family to prepay a student's future tuition and fees at today's rates, sidestepping inflation. A 529 savings plan allows families to contribute to special accounts established to pay a student's qualified higher education expenses at any eligible educational institution.

Alaska does have both types of 529 plans where you can save for college or purchase tuition credits at University of Alaska schools at today's prices. In addition, there is the opportunity to put part or all of your Permanent Fund Dividend into either of the 529 plans. What this means is that many parents think ahead with their children's PFDs and put them directly into a college savings plan. So, children who've been lucky enough to have this are better set for college when the time comes.

Also, the Alaska's College Saving Plan is doing quite well right now in this...