College Savings Plans

If possible, it's helpful to set up automatic, regular deposits into your college savings account, as this will ensure that you're saving on a regular basis. Most 529 plans, including the U.Fund, allow you to easily connect your bank account to the plan and set up these automatic deposits. As well, some families choose to add to their 529 accounts when they receive a large influx of income, such as a tax refund or bonus at work.

It's never too late to start saving for college, as every dollar you put away is a dollar that you won't have to borrow (and pay back with interest) later on. But there are advantages to starting to save for college early, and we recommend that families start saving as soon as a child is born, or even earlier. You can learn more about the advantages to starting your college savings fund in your child's early years in our presentation here.

You can definitely save in different college savings plans at the same time. Many families in Massachusetts choose to save in both the U.Plan Prepaid Tuition Program and the U.Fund 529 College Investing Plan. The U.Plan allows families to lock in current rates on tuition and mandatory fees, so they use their U.Plan savings for those costs. Putting additional funds into a U.Fund account allows families to save for other expenses, such as room and board, books, and supplies.

Fortunately, saving for college has a minimal impact on a student's eligibility for financial aid. The college financial aid formula only assumes that, at most, 5.6% of college savings will be used for college costs, so the remaining 94.4% is protected and essentially, ignored. That means that families who have saved for college can still receive a significant amount of financial aid, even if they've saved diligently over several years.