Using Your U.Plan & U.Fund for College Costs
Summer is almost here, which means parents sending a child off to campus this fall will soon receive their first college bill. Many of these families contact us asking for guidance on how to allocate their college savings to pay for upcoming costs. As the majority of colleges send out eight bills over the course of four years (one for every semester), there are plenty of options in how to spend college savings.
For some families, using their funds evenly over four years is the right decision. It provides a resource to pay down costs each year, and allows for a portion of savings to continue to grow. For other families, choosing to use the entire amount of savings up front makes sense, as it can help delay the need to borrow (and the resulting accrual of interest). Other families wait to the use of funds until the last year or two of college, in order to take advantage of as much fund growth as possible.
The decision of when to use your savings is really best made by your family, based upon your current financial state and any future changes in circumstance, such as another child in college or an anticipated adjustment in income. Regardless of how you use your college savings, we're here to help make the process as smooth as possible. If you have a U.Plan Prepaid Tuition Program or a U.Fund College Investing Plan, we've included details below on how to access your savings. If you've saved in another state's program, it's best to contact that plan's administrator for guidance on using the funds in that plan.
Paying for college with savings from the U.Plan
Funds from the U.Plan may be used to pay for tuition and mandatory fees at any one of the plan's participating colleges and universities in Massachusetts. Follow these steps to use your U.Plan funds:
- Log into your account online.
- Select Redemption in the left-hand sidebar.
- Select the appropriate U.Plan account in the drop-down bar and indicate whether you need the funds sent to the institution or the Account Owner and then provide the requested information.
- On the next Order Review screen you'll be given the dates of when your funds will be sent.
- If you have questions, you can reach a U.Plan expert by calling (800) 449-MEFA (6332).
Paying for college with savings from the U.Fund
Money withdrawn from your U.Fund 529 account may be used at practically any college or university in the country to pay for qualified educational expenses such as tuition, fees, room, board, books, and supplies. Follow these steps to use your U.Fund savings:
- Determine how much of your U.Fund account to spend. In order for your withdrawal to remain tax free, it must be used to pay for the qualified expenses mentioned above, minus costs already covered by tax-free educational assistance (like grants & scholarships) and any funds you'll need to use for a tax benefit such as the American Opportunity Tax Credit.
- Determine if your 529 funds should be sent directly to the college, you, or a third party, such as a payment plan. If the funds come to you, you must submit your request for those funds within the same calendar year — not the same academic year — as when you make your payment to the college to count as a qualified withdrawal.
- To transfer your U.Fund money to a bank account to then use for college costs, add electronic funds transfer (EFT) to your U.Fund. You can also use the Standing Payment Instructions form to set up payments to the school. Or you can set up Fidelity BillPay® for ease of transferring funds yourself. Learn more here.
- If you have questions, call (800) 544-2776 to speak to a U.Fund representative.
Do you have other questions about paying your college bill? We're here to help. We have plenty of valuable information right on our website. You can also call us at (800) 449-MEFA (6332) or email us at firstname.lastname@example.org to get your questions answered from a college planning expert.
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