CSF Type: Radio

Real Wealth Radio

Real Wealth Radio Host Jim Silbernagel conducted a wide-ranging interview with CSF Chair Vivian Tsai on college and higher education planning strategies in a pandemic. The conversation drew upon the findings of CSF’s surveys of parents and high school students on how COVID-19 is affecting their higher education, financing and career plans.

Families receiving refunds from colleges can redeposit money to 529 plans

TIM GRANT Pittsburgh Post-Gazette

April 23: CSF Chair Vivian Tsai explained how families can redeposit funds received as higher-education refunds, into their 529 savings plans.  

Colleges and universities sometimes need to refund a portion of the money families pay for expenses due to problems such as a student deciding to drop a class before midterm or if a student needs to leave school early due to significant changes in the family.

An imminent threat to public health caused by the spread of the COVID-19 virus has forced institutions of higher learning across the country this year to offer refunds to families on a massive scale as dormitories were shut down and millions of students were sent home before the end of the spring semester.

Families that originally withdrew the money from a 529 college savings account will have the option to put the refunds back into a 529 account for the same student with no tax or penalty.

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“This is the first time this issue has been a topic of interest on such a scale as it is now,” said Vivian Tsai, chair of the Washington, D.C.-based College Savings Foundation. “The 529 industry is seeing lots of questions on how to do re-contributions to 529 accounts.”

Mark Kantrowitz, a Chicago-based expert on college financing and publisher of, said about 70% of colleges are giving cash refunds to students. The refunds are typically for 40% to 60% of the room and board cost for the spring semester. He estimates families will get back between $2,500 and $3,500 based on the national average of about $6,000 a semester for room and board.

He said most colleges are not giving students refunds for tuition payments because classes were typically moved online.

Generally, the re-contribution must be made within 60 days of the refund date. However, under temporary Internal Revenue Service guidance, if that 60-day period ends on or after April 1 and before July 15, the re-contribution can be made any time before the later of July 15 or 60 days after the refund date, according to the CSF.

Ms. Tsai said the refunded money could be subjected to federal and state taxes and penalties if it remains outside a 529 plan and is not used for qualified educational expenses.

These 529 accounts are tax-advantaged investment accounts designed to encourage families to save for college. The contributions are allowed to grow tax-deferred. Distributions from the account are not taxed if used to pay expenses for K-12 public, private and religious school expenses or higher education costs.

The College Savings Foundation is a trade group for 529 plan program managers, state sponsors and financial services firms that manage the accounts. The nonprofit organization reports there are 14.5 million individual 529 plan accounts in the U.S. with a total of $371 billion in assets families have set aside for future higher education expenses in 529 accounts.

As chair of the CSF, Ms. Tsai is not only a 529 plan expert but also a parent with two sons — a sophomore and a junior — in college. She is going through the very same experience of other parents. She expects to receive a partial rent refund from both their colleges, which was paid for with 529 funds.

“I’m thinking I could re-contribute the refunded money or I could keep it aside because I’ll probably be billed in July or August for the fall term,” she said. “I’ll probably just keep it out to avoid the inconvenience of even having to think about it. But if one of them was a senior and it was his last year I would definitely put it back.”

Refunds that are not re-contributed are considered non-qualified distributions. The earnings portion of a non-qualified distribution is subject to income taxes at the beneficiary’s tax rate and a 10% tax penalty.

“There may even be a recapture of state income tax breaks attributable to the non-qualified distribution,” Mr. Kantrowitz said.

But that doesn’t mean there aren’t some alternatives to re-contributing a refund.

“Another option is to look for other qualified expenses in the same tax year that can justify the distribution as a qualified distribution,” Mr. Kantrowitz said.

“For example, if a student gets a prorated room and board refund because the college told students to vacate the dorms, but then buys a computer and pays for Internet access because the college moved classes online, they might be OK, since computer equipment, peripherals, software and Internet access are qualified higher education expenses for 529 plans.”

Tim Grant: or 412-263-1591.

Money Sense Radio – WISN AM 1130 – Ellenbecker Investment Group

CSF Chair Richard Polimeni gives Jean Range CFP® a comprehensive explanation about 529 college savings plans, how they can be used by families, how they work, and how they compare to other savings tools.  He also addresses the various higher education paths for students, and how they are becoming more active consumers in considering the costs and value of those options.  (Click on Rich Polimeni – Saving for College)

Top 529 Gifting Programs

If you’re thinking of asking your family and friends for help with your child’s higher education aspirations during the holiday season, then you’re not alone. Fifty-eight percent of parents are already thinking about asking their families and friends for an investment in their child’s education, according to the College Savings Foundation (CSF).

CSF is a not-for-profit based in Washington, D.C., that seeks to provide information and resources for U.S. families saving for college. The foundation includes members of the financial services industry involved with sponsoring or managing 529s.

Its “State of College Savings” 2017 survey included 800 U.S. parents with divergent incomes. The report says 95 percent of parents think online gifting tools and college savings gift registries would make saving for college more convenient.

“Parents today are comfortable with online college gifting options and willing to engage their family and their circle of friends who share their savings goals,” said Richard J. Polimeni, chair of CSF and director of education savings at Bank of America/Merrill Lynch, in a statement.

To meet clients’ needs, firms and digital platforms are providing more ways for parents to accept and manage college savings gifts.

The College Savings Foundation put together a list of products available to parents based on its pool of members. Here are some of the options they mentioned.

Fidelity’s College Gifting Platform

Parents who have a college savings account with Fidelity can create an editable personalized gifting page for their child and invite family and friends to contribute.

Parents can send invitations through Facebook or Twitter or by sharing a link via e-mail or text. Friends and family members interested can contribute with an electronic check.

Parents are able to manage contributions through a private dashboard.

According to CSF, people who have a Fidelity-managed retail 529 college savings account, which includes the UNIQUE College Investing Plan, the MEFA U.Fund College Investing Plan, the Delaware College Investment Plan and the Fidelity Arizona College Savings Plan, can sign up for the 529 Online Gifting Service. Learn more here.

Spryng for Franklin Templeton and NJBEST

Spryng is a gifting tool created for products like NJBEST and the Franklin Templeton 529 College Savings Plan account. Its users who have an account can set up a profile that can be shared on social media platforms or through e-mail. Learn more here.

Gift Certificates And Gift Cards

Some people like placing a gift in a person’s hand, so a gift certificate and a gift card are more their cup of tea.

Financial advisories like Franklin Templeton Investments in New Jersey and Michigan’s MI 529 Advisor Plan’s gifting certificate notices provide such opportunities. Franklin Templeton account holders can tell their friends and family members to gift with handwritten checks or a bank’s bill-pay services.

Friends and family members are also able to print off a decorated certificate to fill out and give as a gift for both Franklin Templeton and the MI 529 Advisor Plan.

College Savings Bank (a division of NexBank SSB) offers gift cards, as well.

This college savings gift registry has grown popular, according to CSF. allows friends, families and employers to buy gift cards at stores like Toys “R” Us and Babies “R” Us. The gift cards can contribute to college savings or student loan payments.

If they can’t make it to a Toys “R” Us store to get a gift card, they can purchase one on the site using their debit or credit cards

Like Spryng and Fidelity’s platform, parents are able to share their profile on Facebook and Twitter and through e-mail. Contributors can also search for the receiver’s profile. Learn more here.

Learning Quest 529 Education Savings Program

The Learning Quest 529 Education Savings Program offers an alternative to passing out your 529’s account number. It uses Ugift for people to invite their family and friends to contribute. Account holders will receive a Ugift code connected to their account to provide to family and friends. Contributors can gift whenever they want without registering or joining the site. Learn more here.

Nest 529 plans also use the Ugift platform for friends and family gifting. This plan also includes printable gift cards once you have mailed in the gift contribution to Nest. Learn more here.

CollegeAdvantage Direct 529 College Savings Plan (Ohio)

Along with its Ugift option, contributors can order greeting cards announcing their helpful gesture. Learn more here.

ScholarShare 529

ScholarShare 529 offers electronic gift cards and eGift, along with its portal on Electronic gift cards carry values between $25 and $500. Its eGifts are similar to Ugifts; the program offers a secure way of gifting by providing a code in perpetuity that enables contributors to give whenever and as frequently as they want. Learn more here.


GoTuition is an online platform for account holders in the UA College Savings Plan (Alaska) and the T. Rowe Price College Savings Plan. If family and friends are not interested in mailing in their contributions, they can access the online portal through a link share via text, social media, e-mail or an evite.

To learn more, click here

The Utah Educational Savings Plan’s (UESP) Gift Program

The Utah Educational Savings Plan (UESP) also offers convenient options for friends and family members of its account holders. Once account holders have created a profile for their college savings plan, they can distribute a gift code and personal gift page link by mail, e-mail and social media channels. Contributors can give by linking their savings or checking accounts or by check. Learn more here.

Article was originally written by Asia Martin and published on