Don't Overlook This Gift Idea
BOSTON - Dec 14, 2022 As the holiday season approaches, consider this thoughtful yet often overlooked gift idea—putting money into the college savings account of a loved one.
While a toy may be long forgotten, a deposit into a child's college savings account will continue to grow over time and contribute to a child's college education. This gift will help the family reach its college savings goals that much faster and relieve some financial stress on the parents and student. With time and earnings, small deposits may turn into sizeable savings.
MEFA has some tips to help give the gift of a college education this holiday season:
- Be creative. A contribution to a college savings account may not make the biggest splash with a child, especially a young one. Consider pairing your gift with a small toy or a t-shirt from your alma mater.
- Spread the word. A recent College Savings Foundation survey revealed that 46% of parents are planning to ask family and friends to make a contribution to a 529 plan instead of giving a material gift. If you're a parent, share with other family members how much you and your family would appreciate a gift toward your children's college education fund. And, if you have a U.Fund (Massachusetts' 529 college savings plan) account, you can even create and share a customized College Gifting page for your children, making gift-giving easier than ever.
- Check with the parents. According to a recent Fidelity Investments® gifting study, 35% of parents will be more likely to prioritize gifting non-material things this holiday season. Though most families would welcome any contribution to a college savings account, check with the parents of each child receiving the gift, just in case. They may have thoughts or specific instructions on how your contribution can be made.
There are different ways to contribute, such as adding funds to a dedicated college savings account like the U.Fund 529 College Investing Plan or the U.Plan Prepaid Tuition Program, toward an ABLE Account, such as the Attainable Savings Plan, or into a family's traditional savings account.
Families saving with the U.Fund 529 College Investing Plan or the U.Plan Prepaid Tuition Program have an added benefit; savings allocated to their accounts by December 31st may qualify for a 2022 MA state tax deduction.
If you are interested in learning more about how to get started helping a child save for the future, visit mefa.org/gifting.
MEFA is a 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, Facebook at mefaMA, LinkedIn, and Instagram.