The Gift Parents Want for Their Children: College Savings
BOSTON [December 18, 2019] - It's a gift most parents say they want for their children. So why aren't more of them asking for it this holiday season?
In a recent survey conducted by Fidelity Investments, 84% of parents say they would welcome a contribution towards their child's college education over a traditional gift. However, only 33% of parents have actually mentioned this idea to their family and friends.
"We encourage parents to suggest that family and friends give toward college savings instead of a traditional gift. Unless we add college savings to wish lists, holidays and birthdays are missed opportunities to invest in a child's future and help the family achieve its college savings goals," said Thomas Graf, Executive Director of MEFA.
Giving the gift of a college education can benefit the child, the parents, and even the gift giver:
- Many college savings accounts, such as the U.Fund 529 College Investing Plan in Massachusetts, offer gifting webpages that make giving as easy as online shopping.
- Young children may not even notice fewer or smaller toys, but the money not spent on toys and invested in college savings will grow over time and reduce the child's college debt.
- Giving for college is a great last-minute gift. Many gifting webpages let givers print out a decorative certificate to present to the parents and child.
- As a contribution benefits the child's future education, it helps lessen the burden felt by parents to reach the family's college savings goals.
For those who like the idea of college gifting but still want to give a traditional gift, the surveyed parents offered a compromise. Two-thirds of parents suggested splitting the total gift amount spent on a child, with 66% for a traditional gift and 34% for college savings. Why not suggest that your loved ones contribute to the child's college savings account, and provide a small item from your child's wish list for those who insist on giving something that can be unwrapped.
Suggesting the gift of a college education
For those saving in the U.Fund 529 College Investing Plan, it's quick and easy to set up a U.Fund college gifting page that connects directly to an account, and account owners can simply share the link for gift-givers to contribute. For more information about setting up a U.Fund college gifting page, visit fidelity.com/collegegift.
The U.Fund 529 College Investing Plan
The U.Fund 529 College Investing Plan allows families to save for college with tax-free earnings and tax-free withdrawals when used to pay for qualified educational expenses. There is no minimum contribution needed to open an account. To learn more about the U.Fund and all its benefits, visit fidelity.com/ufund.
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.
Fidelity Investments "2019 Holiday Gifting Snapshot" November 2019
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