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CSF Type: Press Relese

Online 529 Education Gifting Programs Fulfill Families’ Ecommerce Needs for the Holidays, College Savings Foundation Says

Washington, DC, November 24, 2020 – This holiday season 529 Education Gifting Programs are meeting the needs of families and friends looking to ecommerce channels for holiday gifts from the comfort of their homes.  Having grown in availability and popularity over the last several years, the variety of online gifting tools, crowdfunding platforms, e-gift cards and downloadable gift certificates, make higher education savings as convenient as online shopping for material gifts, according to members of the College Savings Foundation. 

“At a time when families are carefully evaluating the costs of higher education, 529 education gifting tools can make saving easier while sending a powerful message on the value of setting long-term goals. Whether the funds will go to a community college, technical school or a traditional 4-year college, these gifting programs provide a foundation for a child to plan and prepare for their future,” said CSF Chair Vivian Tsai.  

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 Gifting Programs at www.collegesavingsfoundation.org

Although CSF members report 529 education plan gifting throughout the year, most say that contributions increase during the holiday season and into the New Year.  As families become more aware of them as options for graduations, birthdays and special occasions, numerous CSF members report 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.  

“Families are pragmatic about the need to save for their children’s higher education. By sharing a link to a child’s 529 savings plan, they can educate their circle of friends about this option and empower their broader network to participate in a child’s financial and educational future,” Tsai said.

CSF members have implemented ways to make gifting easier. 

  • Alaska 529 and T. Rowe Price College Savings Plan, which have seen a 10% and 13% year over year growth in gifting last year respectively, allow account holders to access the GoTuition® online gifting portal to ask friends and family for gifts by email, evites or social media.
  • Indiana CollegeChoice 529 serving Indiana plan owners can share a Ugift® code with friends and family so they can “give a gift that won’t be outgrown.”
  • College Savings Bank, a Division of NexBank and CollegeChoice CD 529 Savings Plan, offer family and friends the option of making a deposit online.
  • Fidelity-managed gifting programs include UNIQUE College Investing Plan, MEFA U. Fund College Investing Plan, Fidelity Arizona College Savings Plan and Delaware College Investing Plan. Year over year through the end of Q3, Fidelity managed plans saw a 66% increase in online gifting activity.
  • Franklin Templeton: Spryng is a crowdfunding platform where a parent or account holder can send out invitations to contribute via email or social media – along with a personal story about the beneficiary. Contributors can also download a gift announcement to share their gifting news to the family. Spryng is available for Franklin Templeton 529 College Savings Plan and NJBEST account holders.
  • Gift of College offers a platform that enables crowdfunding for college. Friends, family, and employers can contribute to any 529 college savings, student loan or 529 ABLE account using the giftofcollege.com registry. Its suite of products and services includes Gift of College Gift Cards (available online and at over 3000 retailer locations including select Target stores, Save Mart, Lucky and H-E-B) and Gift of College At-Work, an employee benefit platform offering payroll deduction and employer match and contribution technology. 
  • Kansas’ Learning Quest® 529 Education Savings Program and Schwab 529 Education Plan offer gifting options through Ugift®.
  • Maryland College Investment Plan, managed by T. Rowe Price, allows account holders to access the GoTuition®online gifting portal to ask friends and family for gifts by email, evites or social media. Maryland Prepaid College Trust gift contributions are sent by mail using a Gift Contribution Slip.
  • Michigan Education Savings Program offers Ugift® and, along with MI 529, downloadable gift certificates. 
  • Nebraska’s NEST 529 Direct and Advisor College Savings Plans offer a new program called GiftED, starting in December, in which the account owner can send out GiftED invitations for holidays, birthdays or other special occasions from their computer. Contributors can mail their contributions in directly and download gift cards and certificates to notify the beneficiary.  The GiftED platform provides the gift history to the account owner online including the date and amount of any contributions as well as the contributor name. 
  • New Mexico’s The Education Plan® and ScholarsEdge® offer online access to gifting through Ugift®, as well as suggestions for how parents can broach the conversation with others about contributions to a 529 plan.
  • Ohio’s 529 Plan, the CollegeAdvantage Direct Plan, offers tools for grandparents and friends to open or add to a 529 plan. Ohio’s 529 Plan offers online gifting through Ugift®, accepts gift contributions by check and offers physical and digital greeting cards to send the child. The site also has a special page for grandparents.
  • Private College 529 Plan allows families to establish an eGifting event and prompt family and friends to contribute directly to their Private College 529 Plan account, for hundreds of colleges and universities, through a secure portal.
  • Scholars Choice® 529 College Savings Program (Colorado – home state – available Nationwide) participates in Gift of College and Ugift®, the free crowdfunding/gifting service that invites family and friends to celebrate milestones with gift contributions to the Scholars Choice Scholars Choice® 529 account. Gift givers can manage multiple gift contributions and gifting requests can also be posted on social media.
  • 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 19% year over year growth this year.
  • Sootchy, Inc is a new, state-of-the-art, AI-driven platform that leverages crowdfunding through the use of My Circle and My Events to help ease the difficulties families face when saving for college or higher education. On December 10th, families can download the Sootchy app in the Apple App and Google Play stores for the ability to save for their child’s higher education savings and or the ability to save for their child’s private school tuition. 
  • Texas College Savings Plan, Lonestar529 Plan and Texas Tuition Promise Fund offer online downloadable gift coupons, and notify families of the gift. 
  • Utah’s My529’s gifting program links friends and family to a personal gift page where they can contribute with the gift code online through

gift.my529.org or download a gift notice about a contribution by check.  The gifting platform has grown by 17% over the past two years.

  • Virginia529 family and friends can access a Gift Center for digital gift cards, get co-branded gift cards available at Walmart.com or participating Target or H.E.B. Grocery locations, or download gift certificates for a variety of occasions from its website.  It saw a 58% year over year increase in gifting transactions and a 96% increase in dollars contributed.
  • WA529, Washington College Savings Plans, offer family and friends various gifting options. Washington’s DreamAhead College Investment Plan enables account owners to create a gifting page for their student with a unique link that makes it easy to share on social networks and invite family and friends to contribute. The state’s Guaranteed Education Tuition program offers multiple ways to gift, along with downloadable certificates announcing the gift. 

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

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CSF Members’ 529 Gifting Programs Highlighted in Pittsburgh Post-Gazette

CSF Chair Rich Polimeni spoke to Pittsburgh Post-Gazette about the growth of 529 college savings plan gifting options.  The Private College 529 Plan, Virginia529, Fidelity Investments and Gift of College were cited for their growth.

Forget that new Fisher-Price pirate ship. Gifts to college savings plans spiked over the holidays.

The holiday gift-giving season was an especially merry one this year for college savers.

The Private College 529 Plan — created by a consortium of private colleges to allow families to pay for education costs in advance at nearly 300 private colleges and universities — saw a 94 percent increase in contributions at the end of 2018 compared to the same period in 2017, according to the Washington, D.C.-based College Savings Foundation.

Other 529 college savings plans also reported generous gifts pouring into individual savings accounts during the fourth quarter.

Virginia529 saw a 70 percent increase. Gifts given to Fidelity Investment education savers were up 43 percent; and Gift of College — basically a registry that gives access to 529 plans and offers gift cards for sale at Target and other retailers — saw a 35 percent gain in gift contributions at the end of 2018.

“The vast majority of the college gifting sites charge no fee, so it’s free for the client and for the giver,” said Richard Polimeni, chairman of the College Savings Foundation, a nonprofit organization that represents the college savings industry.

Not long ago, when gift cards linked to a child’s college savings plan were introduced to the marketplace they were seen as novelty items.

Parents often felt uneasy about asking friends and relatives to make contributions to their children’s college savings accounts instead of gifting toys and other items.

But families are increasingly comfortable with the notion, Mr. Polimeni said. “Online gifting tools and registries make it easier for parents to share their interest in saving and for family and friends to help them,” he said.

Every state in the country has at least one 529 plan. Some states offer more than one. There are currently about 90 plans and the vast majority offer tools for people to make online contributions to individual savings accounts.

The 529 plans — named for the section of the federal tax code that established them — are state-run programs that allow families to invest funds for college. Contributions grow tax-free and may be withdrawn tax-free to pay for education.

Contributions aren’t deductible from federal income taxes, but many states — including Pennsylvania — allow a deduction on state tax returns.

Pennsylvania allows a tax deduction up to the annual gift exclusion amount — $15,000 per contributor or $30,000 for a married couple. Pennsylvania rules are considered especially generous because the state will give contributors the deduction regardless of whether it is a Pennsylvania plan or an out-of-state plan.

It used to be much harder to make a gift to a child’s 529. Donors had to print out a form, know the account number and mail a check directly to the provider. The process was so cumbersome that many people ended up just giving cash or check directly to the parents.

Today, most 529 plans have online systems in place to allow contributions from individuals. These tools reassure contributors that the money is going where they intend for it to go.

Although funds from 529 plans cannot be used to repay student debt — without incurring a penalty — saving money in a plan can be a way of avoiding education debt.

Student loan debt affects an estimated 43 million Americans. According to Student Debt Relief, total student debt stands at $1.52 trillion; the amount borrowed each year is $106.5 billion; 60 percent of  college graduates have debt; and the average debt per graduate is $37,172.

Tim Grant: tgrant@post-gazette.com or 412-263-1591.

Financial Advisor (FA) reported parents’ increased levels of savings and use of financial advisors from CSF’s State of College Savings survey

U.S. Families Embrace 529 Plans; Open To Help From Advisors

RAYMOND FAZZI

The nation’s 529 savings plans appear to be winning over more parents and other college savers, and at the same time broadening opportunities for financial advisors, according to a new survey.

About 50 percent of U.S. families now have a 529 plan, which is up from 38 percent a year ago, according to the 12th annual State of College Savings Survey by the College Savings Foundation, a non-profit dedicated to promoting the 529 plan industry.

The survey also indicated the college savings market is an area of growth for financial advisors: 48 percent of respondents said they work with a financial advisor, while 74 percent said they would do so if it would help with college savings.

“529 college savings plans have come of age,” said Richard J. Polimeni, chairman of the College Savings Foundation and head of education savings at Merrill Lynch. “We are excited to see that parents are embracing proven strategies for funding their children’s higher education by saving early, often and with the advantage of 529s.”

On a broader level, the survey did find a slight dip in the number of U.S. households saving for college costs.

The survey found that 79 percent of parents across the nation are saving for their children’s college costs, which is down from 83 percent in 2017.

Of those saving, 45 percent have saved more than $25,000 per child and about 75 percent have saved more than $5,000 per child.

The survey also found that 40 percent of parents said their children had considered not going to college, which is up from 28 percent a year ago. Of these parents, about 33 percent said the reason for the hesitancy was that their children didn’t want them to pay large sums for college. Another 17 percent said it was because their children didn’t want student debt.

“Ultimately, the vast majority (85 percent) of parents whose children doubted they’d go to college said the children decided to go after all,” the foundation said in a press release. “This is a significant uptick from last year’s survey, which showed that only 48 percent of the doubting students would go on to higher ed.”

These were some of the other survey findings:

• About 72 percent of parents expect their children to contribute to their higher education costs, either through working (46 percent) or saving (24 percent).

• Having their children live at home during college was the most popular (28 percent) cost-cutting strategy among parents. Starting college studies at a community college (26 percent) and pursuing college-credit courses in high school (14 percent) were among the other strategies.

• About 57 percent of parents plan to borrow money to pay for their children’s college education, with 62 percent planning to use education loans and 18 percent through consumer credit vehicles such as credit cards.

The survey is based on responses from 800 parents of various incomes taken through Survey Monkey.

The College Savings Foundation is a Washington, D.C.-based non-profit organization whose membership includes investment companies, 529 plan providers and other key players in the 529 plan industry.

How Youth Plan to Fund College

Survey Infographic

Contact: Lynthia Romney (914) 238-2145/(914) 589-2140 romneycom@gmail.com

GEN Z CHARTS A PRACTICAL PATH TO COLLEGE ACCORDING TO 2018 COLLEGE SAVINGS FOUNDATION SURVEY OF HIGH SCHOOL STUDENTS

9th annual survey reveals focus on skills-building in higher education and saving to get there

Washington, DC – Today’s high school students are practical consumers who are choosing their higher education paths knowing the costs of school and the trade-offs necessary to fund it. The College Savings Foundation’s 9th annual How Youth Plan to Fund College survey of sophomores, juniors and seniors across the country revealed the characteristics of independence and self-reliance that are often attributed to their age group, “Generation Z.” For example, 86% of high schoolers are looking to pay at least part of their higher education costs. 75% said that costs are a factor in deciding which school to attend, and the majority, 57%, is already saving for it.

“High school students are taking responsibility for their education choices and making decisions early in life to support them,” said Richard J. Polimeni, CSF Chair. “We’re encouraged to see that saving is already an important part of their education planning process.”

The self-determining characteristics were also displayed in how they will help cover higher ed costs or reduce expenses. 85% of high school students plan to work in college and 62% plan to cut costs by living at home. The majority (51%) of all high school students are currently working to earn money for their higher education.

The findings also revealed that students are thinking about the long-term value of their education. 81% would like to see colleges promote education and skills-training rather than only offering majors for future employment, and 70% would prefer to go to an institution taking that approach. In addition, 63% said that their career plans were affecting their school choice. 

Students are talking with their parents about college plans. 82% talk about their involvement in financing college. When speaking to their parents about college-related topics, 43% of students said the number one topic was the career path they want to follow, with 27% saying it was the type of school they wanted to attend.

53% of students surveyed are going to a 4-year college, with 41% going to public and 12% to private college. Over a third – 36% of students – are heading to community college (28%) or vocational/career programs (8%). 

Students seem to embrace multiple paths to higher education, with the majority, 52%, saying that they think of vocational/career schools and apprenticeship programs in the same way as they do college.

Motivated to Save and Reduce Debt Dependence

The survey found that the majority of high school students, 57%, are actively saving for higher education, primarily in a savings account and in 529 college savings plans. Students have been successful in amassing funds, with 65% already saving $1,000 or more towards higher education costs.

Accordingly, they prioritize monetary gifts to help with that savings. 67% of high school students would rather receive money for education on special occasions rather than tangible gifts. 

The majority of students, 52%, said their parents are also saving, primarily in savings accounts and 529 college savings plans. 59% of those whose parents were saving said their parents have saved more than $5,000 and 35% said their parents have saved more than $15,000.

Students’ focus on saving may be due at least in part to their concern about student debt, which currently exceeds $1.4 trillion in the U.S. 65% think that they will or possibly borrow money outside of a financial aid package, with 43% anticipating needing to borrow more than a quarter of their education costs.

The majority, 54%, is very or somewhat concerned about their ability to pay it back.

Some additional findings of the survey:

  • Costs impact higher ed decisions in a variety of ways:  65% of students said that costs affected whether they attend college at all. A majority, 52%, said that costs mattered in deciding on whether to attend college part- or full-time. 
  • Students will contribute significantly to the costs of higher ed:  A total of 86% — 36% definitely and 50% possibly – are planning to pay for part or all of their higher education costs. Of those, 64% of them will pay for at least a quarter of their total education costs.
  • Work is the leading reason to take a gap year:  21% of students are taking a gap year, but 58% of them were doing so to work.

The 2018 How Youth Plan to Fund College survey reached over 500 high school sophomores, juniors and seniors across the country via Survey Monkey.  The College Savings Foundation (CSF) is a Washington, D.C.- based not-for-profit organization helping American families achieve their education savings goals. www.collegesavingsfoundation.org

College Savings Foundation and Nick Jr. Beyond the Backpack Partner to Promote Saving for College

529 Savings Plan Events Offer Easy Access to College Savings Tools

Washington, DC – May 24 –The College Savings Foundation (CSF) is partnering with Nick Jr. Beyond the Backpack to provide parents with the tools needed to begin planning and saving for their children’s higher education. As part of the partnership, the Nick Jr. Beyond the Backpack website will link to CSF’s own site, where parents can find a wealth of college savings information and tips, including a list of family-friendly college savings events and contests taking place across the country during the month of May. The Nick Jr. Beyond the Backpack site will also feature a brand-new savings calculator to help parents see how the power of compound interest can turn weekly savings into a sizeable college fund over time.

“CSF is thrilled to be part of this important connection of families to practical college savings planning. Parents tell us that they are eager to start saving early and we know it will earn them long-term results. Our partnership with Nickelodeon will bring all the pieces together at their fingertips,” said CSF Chair, Richard Polimeni.

“The Nick Jr. Beyond the Backpack campaign was created as a means to provide parents and caregivers with the resources they need to prepare their children for academic success,” said Andrew Machles, Vice President, Public Affairs and Viewer Services, Nickelodeon Group. “Our partnership with CSF is an organic extension of the Beyond the Backpack mission, as it highlights the importance of education and emphasizes that it’s never too early for parents to begin planning for their children’s future.”

CSF is a leading nonprofit helping American families save for their children’s college education. www.collegesavingsfoundation.org

Nick Jr. Beyond the Backpack is a kindergarten readiness initiative geared towards helping parents and caregivers prepare their preschoolers for academic success through interactive elements including a dedicated website at www.beyondthebackpack.com where parents can customize a learning plan with games, videos and printables. All elements focus on five key areas deemed critical to educational achievement: family engagement; health and wellness; early literacy; social and emotional development; and fundamental STEM (science, technology, engineering and math) skills.

Contact:
Lynthia Romney  914-238-2145/914-589-2140
romneycom@gmail.com

Kiplinger’s – New Rules for Tax-Free Spending From Your 529 College-Savings Plan

By Kimberly Lankford
Follow @Kiplinger

I hear there are new rules about using 529 money tax-free for computers. What are the rules, and what other expenses are fair game for using 529 money tax-free? What records do I need to keep?

Congress recently passed legislation that permits the tax-free use of 529 money for computers – both retroactively for 2015 and permanently for future years (see 12 Valuable Tax Breaks Congress Brought Back to Life). A computer had been an eligible expense for tax-free withdrawals from a 529 in 2009 and 2010, but for the past few years it was eligible for tax-free withdrawals only if the computer was required by the college for attendance. Now you can take tax-free withdrawals for a computer, printer, scanner and other peripheral equipment, education-related software (not games) and the cost of Internet access – whether or not it is required by the school. The college student must be the primary user of the computer and equipment.

You can also use 529 money tax-free for college tuition, room and board, fees and required books. “Most of the expenses related to taking classes count, but you can’t use it for transportation,” says Mary Morris, chairman of the College Savings Foundation and CEO of the Virginia 529 College Savings Plan.

You can even use 529 money tax-free for room and board if you live off-campus, as long as you’re attending college at least half-time. Your actual expenses count, up to the amount the college specifies as the room and board figure in its cost of attendance for federal financial aid purposes (the cost is usually listed on the college’s Web site, or ask the financial aid office).

You don’t need to provide special documentation to your college savings plan administrator to withdraw money, but you do need to keep records of your expenses or the date and price of the purchases in your tax files. “If you’re audited, you need to be able to establish that the 529 withdrawal was for qualified higher education expenses and that you have the records to match up with that,” says Morris.

In years you make 529 withdrawals, you’ll get a 1099-Q tax form from the plan administrator, usually by January 31 of the following year (although some may be delayed by a few weeks this year because of a technical change in how administrators report withdrawals, which was also included in the law signed in December). If the withdrawals were for eligible expenses, you don’t need to do anything when you file your taxes – just keep the 1099-Q form and your receipts in your tax records. But if you use 529 money for any ineligible expenses, you’ll have to pay taxes and a 10% penalty on the earnings withdrawn. The 1099-Q will specify which portion of the withdrawal is considered principal and which is earnings.