Big Changes Coming to the MEFA U.Plan
BOSTON [June 6, 2019] – Considered one of the best and safest college-savings options, the U.Plan Prepaid Tuition Program is even better in 2019 with new, year-round savings capabilities and online account access. Working with U.S. Bank Global Fund Services, the Massachusetts Educational Financing Authority (MEFA) has enhanced the U.Plan to make saving for college even easier.
In the world of college savings plans, the U.Plan stands apart. U.Plan account holders pay today's prices to lock in a percentage of future tuition and mandatory fees at over 70 colleges and universities in Massachusetts. This is achieved by using account holder savings to annually purchase tuition certificates backed by the Commonwealth of Massachusetts. However, should the student decide to attend college at an out of program college, the investor will receive their initial investment, plus interest compounded annually.
"The idea behind the U.Plan is really amazing—go to college in the future while locking in a percentage of today's cost of tuition and mandatory fees. We understand the plan's structure and limited enrollment period created a barrier for families to save, so we have made it much more consumer-friendly," said Thomas Graf, Executive Director of the Massachusetts Educational Financing Authority (MEFA), which administers the U.Plan.
In an effort to enhance the customer experience, MEFA partnered with U.S. Bank Global Fund Services, a leader in consumer banking, to make saving in the U.Plan as easy and convenient as saving in a traditional 529 college savings account. Starting this year, families can deposit funds into the U.Plan at any time and manage their accounts online, and that includes the ability to:
- Start and continue saving
- Set up automatic deposits
- Request a disbursement
- Establish an account for another Beneficiary
The U.Plan Prepaid Tuition Program has several unique features:
- Saving in the U.Plan is designed to keep pace with the rising cost of college by locking in a percentage of future tuition and mandatory fees at current prices
- Massachusetts residents qualify for a state income tax deduction for U.Plan contributions—up to $1,000 for single filers and $2,000 for married couples filing jointly
- There are no Massachusetts or federal taxes on earnings
The Tuition Certificates purchased will cover the same percentage of tuition and mandatory fees when they're used in the future, regardless of how much the tuition and fees have increased. Funds deposited by July 15, 2019 will be applied to lock in 2019-2020 academic year tuition and mandatory fees at participating colleges and universities; funds deposited after July 15, 2019 will be applied to lock in 2020-2021 academic year tuition and mandatory fees at participating colleges and universities.
For example, one family deposited $5,000 into the U.Plan upon the birth of a child, which at the time equaled 100% of a year's tuition and mandatory fees at a state university. When the child enrolled at the state university 18 years later, his tuition and mandatory fees were fully covered, even though the tuition and mandatory fees had grown to $13,000 per year.
For more information on how the U.Plan works and how to open an account, visit mefa.org/uplan and watch a quick video, The U.Plan Made Simple.
MEFA is a not-for-profit state authority, not reliant on state or federal appropriations, established under Massachusetts General Laws, Chapter 15C. MEFA's mission, since its founding in 1982, has been to help Massachusetts students and families access and afford higher education and reach financial goals through education programs, tax-advantaged savings plans, low-cost loans, and expert guidance. All of MEFA's work aligns with the ever-present goal to support the independence, growth, and success of Massachusetts students and families. Visit mefa.org to learn more or follow MEFA on Twitter @mefatweets and on Facebook at mefaMA.
About U.S. Bank Global Fund Services
Headquartered in Milwaukee since 1969, U.S. Bank Global Fund Services provides single-source solutions to support a variety of investment strategies and products, including mutual funds, alternative investments and exchange-traded funds. As of June 2018, the division currently services 585 fund families comprised of 3,295 portfolios, 4,132 fund classes, and 4.5 million shareholder accounts with $1.14 trillion in client assets. U.S. Bank Global Fund Services is a subsidiary of U.S. Bank, the fifth largest commercial bank in the United States.
Lisa Rooney, PR Manager
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