CSF Type: Podcast

Tribune News Service: Colleges plan refunds because campuses closed early. CSF was quoted in this syndicated story on 529 and college refunds.

By Steve Rosen Tribune News Service (TNS)

Apr 20, 2020

Prepare to hit the reboot button on your 529 college savings account if it was tapped to pay for room, board and other costs this school year.

That’s because many colleges and universities plan to offer full or partial refunds to parents or students after campuses were closed and classes moved online to slow the march of the coronavirus infection.

Some schools have said they plan to prorate charges for room and board based on the date students had to pack up and move out. Some schools have already started refunding money, while others have indicated they will.

What about tuition? Few, if any, schools plan to rebate tuition because classes are still taking place, albeit in different venues.

The rebates present a potential tax risk for parents and students who originally used their 529 college savings account to pay some or all of these education costs. There could be withdrawal penalties, too.

Generally speaking, because the refunded amounts are no longer being used for qualified educational expenses, the Internal Revenue Service could reclassify the money as taxable distributions, said Chris Gullotti, a financial adviser with Canby Financial Advisors in Framingham, Mass. He covered this potential tax risk in a recent blog post.

As with many other complicated tax issues that have cropped up in the wake of the pandemic, the IRS has issued some instructions on how to avoid problems with your 529.

According to the IRS, account owners can “recontribute” refunded money into their 529 plans. The catch: This generally must be done within 60 days of receiving the refund.

If the refund is not recontributed by the deadline, it will be considered a non-qualified distribution, unless it was used for other qualified educational expenses in the same year, said Mark Kantrowitz, the publisher of

For example, if a student gets a pro-rated room and board refund from vacating the dorm, but then buys a computer and pays for internet access for online classes, “this might be OK,” Kantrowitz said. That’s because computer equipment, software, internet access and other similar purchases are qualified higher education expenses for 529 plans.

To avoid tax unpleasantries, the nonprofit College Savings Foundation is urging affected 529 account holders to take care of the recontribution as soon as possible.

Gullotti recommends taking the following steps to make sure everything is done correctly:

—First, contact your 529 plan provider, which may have specific requirements for documenting recontributions.

—Document and save the refund information in case the IRS ever challenges the recontribution. “Remember, you should only recontribute the portion of the refund paid for by your 529 plan,” Gullotti said.

Gullotti suggests sending a check, rather than an electronic payment, for the amount going back into the 529, so there’s a paper trail.

One more potential complication: Some schools are issuing vouchers or credits toward future college costs, and these coupon refunds are already being challenged in the courts.

For now, if the refund is provided in cash, it does not affect the student’s financial aid eligibility, Kantrowitz said. But if a voucher or credit is issued, it will be considered estimated financial aid and will reduce the student’s eligibility for future need-based financial aid, he said.



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529 Education Gifting Programs Make Holidays Easy for Families and Friends, College Savings Foundation Says

Washington, DC, November 14, 2019 – As the holiday giving season approaches, 529 Education Gifting Programs and their widening array of online gifting tools, crowdfunding platforms, e-gift cards and downloadable gift certificates, are making higher education savings easier for parents, family members and friends, say members of the College Savings Foundation.   

“With student loan debt soaring to $1.6-trillion, saving for a child’s higher education is climbing to the top of the wish list for many parents.  529 education gifting tools offer a streamlined solution by helping family and friends to save – and also feel good about reducing the child’s future need for debt,” said CSF Chair Richard J. Polimeni.  

Among CSF members’ offerings are personalized websites for crowdfunding, online registries, electronic or physical gift cards purchasable online or at national retail and grocery chains, and downloadable gift certificates.  Links and special features are included in this Infographic.

The holidays prompt a spike in 529 education gifting contributions – although increasingly they are alsobeing used for New Year’s Resolutions, birthdays, graduations and special occasions throughout the year.  Numerous CSF members report robust year-over-year growth in their gifting program contributions.

One benefit of online gifting is that parents can include a link to a child’s customized 529 education savings platform in an e-birthday invitation or social media site. New CSF data from its State of College Savingssurvey show that only one in five parents say they already ask friends or family members to make a 529 college savings contribution rather than a material gift.  However, when it came to making their own education savings gifts, one third (33%) of parents said they use either 529 college savings plan gift registries or online gifting tools.

“By sharing a link to a child’s 529 savings plan, a family can spread the word about these savings tools and let their friends decide.  It’s an increasingly popular way to empower their broader network to participate in a child’s financial and educational future,” Polimeni said.

CSF members have implemented ways to make gifting easier: 

  • At Virginia529 family and friends can access a Gift Center for digital gift cards, get co-branded gift cards available at or participating Target or H.E.B. Grocery locations, or download gift certificates for a variety of occasions from its website.
  • offers a range of options (which can be used with any 529 plan) including electronic or physical gift cards purchasable online or at retailers (such as select Target, Barnes & Noble, Brookshire Brother’s, Fred’s Pharmacy, Cumberland Farms, Kinney Drugs, H-E-B, Save Mart, Foodmaxx, and Lucky Supermarkets). Employers can purchase Gift of College gift cards in bulk to reward/recognize employees and to celebrate employee births and other milestones.
  • Nebraska’s NEST 529 Direct and Advisor College Savings Plans offer access to Ugift as well as a downloadable greeting card and gift contribution coupon.  
  • Learning Quest 529 Education Savings Program is launching a Ugift® crowdfunding capability in mid-December.   
  • Indiana’s CollegeChoice 529 plan owners can share a Ugfit code with friends and family so they can “give a gift that won’t be outgrown.”

Additionally, otherCSF member gifting programs have experienced robust growth: 

  • Alaska 529 or T. Rowe Price College Savings Plan account holders can set up a gifting portal to share with friends and family by email or social media. They have seen a 172% increase in gifting into Alaska 529 accounts and 250% increase in gifting into T. Rowe Price College Savings Plan accounts.
  • Fidelity-managed gifting programs have soared in popularity (UNIQUE College Investing Plan, MEFA U. Fund College Investing Plan, Fidelity Arizona College Savings Plan and Delaware College Investing Plan) together experiencing 76% growth in online contributions.
  • My529’s gifting program has seen a 25% increase over the last year.  Friends and family can contribute with the gift code accessed through or by writing the code in the memo section of a check.

  • ScholarShare 529, California’s official college savings plan, allows account holders to establish a gifting portal profile and share it with friends and family by email or social media. ScholarShare 529 has experienced a 25% Year-Over-Year increase in gifting.

The College Savings Foundation (CSF)is a Washington, D.C.- based not-for-profit organization helping American families achieve their education savings goals.

Rich Polimeni tells “Mottek on Money” how parents can save strategically through 529s.

CBS Radio – Los Angeles KNX 1070, 9/23/18:   Rich Polimeni tells “Mottek on Money” how parents can save strategically through 529s.  Recognizing College Savings Month, Rich also shared the findings of CSF’s State of College Savings survey.

Bob Brooks’ Prudent Money: “Is There Hope for Our Financial Future?”

Is There Hope for Our Financial Future?
by Bob Brooks
originally posted on:

It is important to see how younger generations are approaching money.  Without question, we need to see the younger generations shift in the way they handle financial responsibility.  Let’s face it – Generation X and to an extent the Baby Boomer generation are not doing so hot.

I write about Millennials and how they might be the most financially responsible because of their attitudes towards debt and that they have the highest savings rate. Of course, this survey on why their saving (which is not for retirement) is a little troubling.

Next up is Generation Z. Researchers don’t agree on when the Generation Z begins. The consensus is birth years between the mid 90’s to 2000 might offer the most hope for a shift in financial responsibility. The College Savings Foundation just released their eight-annual survey on how high school students decide and fund college. Apparently, this generation is tackling the high cost of college intentionally and responsibly and serious about how college is paid for.

Here are the results:

— How it can help their careers: 69% say career plans affect their school choice

— What are the costs: 79% say that costs are a factor on which college to attend; and 39% said it changed their direction (40% to community college) *

— Avoiding debt:  only 11% said they would take on debt (down from 20% last year).  Including those who would “possibly” take on student loan debt, the number also dropped to 63% from 71%

— Saving. 60% of students are saving – with nearly half having saved between $1,000 – $5,000 and over one quarter more than $5,000 22% of them are saving primarily in 529s. 60% of their parents are also saving with 32% primarily in 529s.

NOTE – that is more in savings than the majority of adults have saved.

— Jobs.  54% have already gotten jobs to earn money for higher education; and 85% said they would work during college – with 20% planning to work full-time.

— Changing course due to costs*. 39% of students said that costs had caused them to change their higher education paths.  Of those, here is how they changed course:

  • 41% said they were now planning to attend a state school
  • 40% said they are attending a community college
  • 9 percent will be attending a vocational or career school
  • 7 percent indicated that they will be working instead of attending school

Now compare that to my generation, generation X which is a financial train wreck.  We never put that much thought into selecting a college.  After all, we were “entitled” to get that college. education and lifestyle or should I say lifestyle and maybe a college education.

So, there is hope in our financial future after all!