Please note that this transcript was auto-generated. We apologize for any minor errors in spelling or grammar.

This is using your you plan savings and. I’m gonna go over briefly how to participate in the webinar. As I said, if you have any questions, use the q and a function and not the chat function. Uh, it’s easier for me to see the q and as. Um, I may not respond to them right away. If I know we’re getting to the answer to your question or if it’s about your account specifically, I may say, let’s talk privately about that.

If you’d like a live transcript, uh, you can click the live [00:01:00] transcript button. That’s a pretty popular thing for folks to do.

Yes. I just wanna reiterate, this is regarding the U plan, not the 5 29. My name is Jonathan Hughes. I’m the Associate Director of College Planning and Content Creation at MEFA. I’ve been at MEFA for over 20 years and I’ve worked, um, I. With the U plan pretty closely, uh, throughout that time. So we used to administer all the accounts here at MEFA for the U plan.

We don’t do that anymore. That is, uh, US Bank that currently performs that function. But, uh, I know the program pretty well. And I know that now is the time of year when you have students maybe heading off to college in the fall, that folks start wondering, how can I get my funds out or get them to the college?

And this is what we’re gonna talk about here tonight or today. Before we do that briefly about MEFA, I. Uh, even if you’re a [00:02:00] customer, you may not know everything that we do. We were created by the state of Massachusetts back in 1982 with a public service mission to help families to plan, save, and pay for college.

We do that in a variety of ways. Obviously through the U plan is one of the ways that we help folks save for college. But we also offer fixed interest rate, uh, education loans, and we do a lot of free. Guidance and outreach regarding financial aid, college admissions, um, comparing college loans, anything regarding planning, saving, and paying for college and career readiness as well.

So if you have any questions in that realm, please think of us as a free resource because that’s exactly what we are now today. This is kind of everything that we’re gonna be talking about. It looks like a lot. It’s not as long as it looks, I promise you. Um, I kind of wanted to think about things chronologically and go through how you would interact as you plan customers with getting your funds out.

And one of the first things [00:03:00] that might occur and what are the, uh, all the way down to the, to the last. Way in which you may, uh, touch on this process. So the first thing is you, the you plan and financial aid. I know many of you have probably filed your financial aid forms already, but we’ll talk just for a minute or two about how the you plan should be reported and how it may or may not affect financial aid.

Um, the timeline of when you can use your u plan savings and, and how you would do that. Um, the list of participating in colleges, how you can. Assess the value of your U Plan savings, uh, account or u plan, uh, certificates, how much you can request, um, the various ways that you can distribute funds, either to the college or as a cash out distribution to the owner.

Post maturity interest, which is something that you may run into, we do with post maturity interest, and then any leftover funds that you may receive. So once again, questions, [00:04:00] don’t be afraid to ask. The first thing we’re gonna talk about the you plan and financial aid. Um, uh, people sometimes ask, how do I.

List the U, the U plan on my fafsa. Um, and it’s, it’s the same as any other asset essentially. So, U plan accounts that are owned by the parents should be reported as an asset of the parent, along with any other assets that may be reported. So any 5 29 plans, any stocks, any mutual funds, bonds, um. Second property or, or businesses.

All of that goes, uh, under the parent assets. Uh, and the amount that you should list under that is not, I know the, the u plan obviously has to do with locking intuition, et cetera. That doesn’t have anything to do with. Uh, how much you list on the fafsa. What you list on the FAFSA is what you have in the account, plus the interest.

So that total value of what you put in plus [00:05:00] the interest, so not your prepaid tuition. Um. Then also it should only be for the child that you are filing a FAFSA for. So, uh, that is a change over the past couple of years. So if any of you have not filed a FAFSA yet, or did file a FAFSA and, you know, maybe you, you put all of the accounts that you have.

If you have three children and you’re filing one fafsa. It used to be that you were supposed to report the value of all three accounts on that one child’s fafsa because you could transfer beneficiaries. That’s no longer the case. You only report what you put in plus the interest for the child on which on whose FAFSA that you are filing.

Um, another thing to mention is that. Once you have your financial aid offer from a college and you have, you know, maybe grants and scholarships and loans, et cetera, and you have a balance due, I just wanna reiterate the value of your U plan percentage. So if you have 50% of, of, uh, [00:06:00] this year’s tuition and mandatory fees saved for the U plan, that is 50% of the.

The tuition and fees before any financial aid has been granted. So you take that financial aid first, um, and then your, your percentage, the value, value of your percentage is based on the total. So not your balance, but. The total amount of tuition and fees. And so use all of your financial aid before turning to your U plan.

So if you have scholarships, if you have grants, if you have, you know, other pieces of aid, uh, that, that eat into that, that tuition and fee cost, you take those first and then you can look towards your savings, including the year plan to cover the balance. So that’s how that should work with financial aid.

And a big part of why we’re doing this now, uh, is because now is the time when people are starting [00:07:00] to, they’ve made their deposit, right? May 1st has come and gone. So you’ve looked at your financial aid offer, you’ve made your decision, you’ve made your deposit at your school, and now you have to pay a balance.

Um, and so you can begin to do this. You can begin to direct funds out of your U plan in the spring. And so that is actually currently available. You can go, uh, onto the website and start to say where you want us to send funds. Uh, but before we get into that, I want to talk about which certificates you can direct out.

So certificates that either have matured or are maturing this year are certificates that you can. Use for the upcoming year’s tuition. And so if you have a ma uh, a certificate that matures in 2025, that. Mature is August 1st, so you plan certificates always mature August 1st of [00:08:00] their maturity year, and thus they can’t be sent out until that first week in August, that first Friday in August.

But as I said, you can begin to direct the funds out of your account. That is tell us where you want those funds to go once they do mature starting in the spring, and that’s something that you are able to do now online. How your. How you’re able to do that depends on your profile. So if you haven’t created an online account, you’ll be mailed out a paper distribution form, and those have not gone out yet, but will be going out in the coming weeks.

Um, if you do have an online account set up, you can go and access your online account and say you would like the funds to be dispersed to this college or that college, or to be cashed out to you as an owner when they do mature in August. First, um, [00:09:00] so you plan funds are dispersed year round. So, uh, as I mentioned, the certificates for the upcoming year can go out beginning on August 1st, but that’s not the only time they go out.

We are constantly distributing funds throughout the year, every week. Um, and so once your account is matured. You can hold onto those funds or you can access them right away, transfer them out to a, to a, a college or cash out. But only matured certificates can be, uh, dispersed through through the normal procedures.

So, um, I’m sorry, only ma Yes. Only matured certificates. So those are the only certificates that we can actually, uh, you can select to, to go out to a college or to be cashed out. To you through this process. Either, you know, filling out a distribution request form on paper or going onto your account online or calling up.

So [00:10:00] this is the three ways that you can do it, as I just mentioned. So if you haven’t sent up, you plan online access, you’ll receive a distribution request in the mail, sign it, tell us how you want us to send the funds and send it back. As it mentioned, you can go online or you can call 8 8 8 5 9 0 5 6 5 3 and speak to a U Plan representative and say that you would like the funds distributed.

Now, these are the three ways in which you can distribute your uh, U plan funds. You can send. U Plan funds two A, participate in college. So if your student is a student at a U Plan, participating college or university, you are, uh. Able to send the funds there and get a percentage of, to the percentage that you locked in of tuition and mandatory fees for the maturity year.

Uh, if they are not, you can cash out and get what you put in plus the interest back, [00:11:00] or if their plans are not final or if you think they may change. That is if, if you know a student is going to a non-participating college, but you think. They may, uh, change their mind and go to a participating college.

You can hold the funds so we can hold onto these funds up until about six years after maturity. Um, but eventually you will have to either cash those funds out or send them to a college. But as I said, um, upon maturity, we can hold these funds until you know your plans if they’re not final. I have a question here.

I wanna pick it up.

So if you have funds maturing in 2025, you can wait to use those funds until 2027. Yes, that is true. Uh, so you can hold onto these funds until 2027. The thing to keep in mind is that, um, if you’re using them at a participating college. What they were worth in [00:12:00] 2025 at that college is what they will be worth in 2027 at that college.

So they’re gonna keep pace with tuition through maturity, but once they’ve matured, uh, they’re not going to keep pace with tuition anymore. It’s gonna be frozen. Your value will be frozen at that 2025 level. However, there’s still ma, there’s still interest that’s going to be accruing on your investment and we’ll talk about that, uh, near the end of the presentation.

But, uh, you will get that post maturity interest that accrues, uh, after the fund has matured. So between 2025 and 2027, all that interest will be sent to you in a check as we have to do by law. But yes, you can hold onto those certificates and use them in a later year. Thank you for the question and keep ’em coming.

So this is the list of participating colleges in the U plan. I’ll leave it up, um, so you can take a look at it and see if, uh, your college is on the list. List has stayed [00:13:00] pretty static. Um. Not too many colleges being added or dropping off. And if they are have dropped off, then it’s because the college itself has either closed or merged with another college.

But, uh, all of these colleges are colleges that have entered into the U Plan contract with MEFA pledging to honor the the certificates.

Okay. So at this point in the year. People may be sort of stuck in the middle. And, uh, what I mean by that is that they’re trying to assess how much money they have in the U plan because they have to figure out, you know, how much between how much they can afford out of their own pocket in another accounts, or how much they may need to borrow in a, in a college loan.

Um, what is the amount that the U Plan can actually account for? And it can be difficult to tell at this point in time, uh, because you may have a bill from a college. [00:14:00] Or you may not, so you don’t know yet. And also we know what percentage of tuition you purchased, but if you have a percentage of the upcoming year’s tuition, we need to know what that upcoming year’s tuition is before we can tell you the dollar value of that.

Um, so we send a email out to all the participating colleges. Asking them for their upcoming years tuition and fees. And as they get them to us, we update that in the system. Uh, so you can go on to, once again, your account online and look at the school and, and see if the 20 25, 20 26 to tuition has been updated in the UAN system yet.

Um, we, those numbers will be being updated throughout the summer and some of sometimes colleges. Uh, you know, we’ll get them to [00:15:00] us very quickly and, and sometimes colleges won’t know until it gets very close, uh, to the fall what their upcoming tuition and mandatory fee figure is going to be. Uh, so you can call as well, uh, at the 800 number, the 8 8 8 5 9 0 5 6 5 3, uh, and see if the college has provided us.

That, that information, um, and you can know what your, your percentages and, and sort of go use the calculator and figure out what value, what dollar value the percentage of tuition you have purchased is. Um, but you may have to estimate if the college doesn’t have that to us yet. One more thing I’d like to say is that you plan can only send up to 100% of the current year’s tuition and mandatory fees.

So sometimes you may have more than a hundred percent of tuition and fees saved for the [00:16:00] upcoming year. Uh, even if you have 150% of tuition and college is $10,000, you think, Hey, great. I have $15,000 I can use. We can only send to the college, uh, up to 100% of tuition and mandatory fees and whatever is left in that account, you can either cash out and get what you put in plus the interest back or wait until a later year to use.

Uh, the other way that you may choose to access funds is through cash outs. And so, uh, you get what you put in plus the interest. As far as what that is worth, we won’t know until August 1st because that’s when interest gets assessed. It gets assessed yearly August 1st, and so that’s when your funds mature.

Uh, you’ll be able to view what you have plus the interest through last August. Um, and you may have to estimate, you know, or just know you have at least this amount coming to you from the U plan. [00:17:00] But we won’t know until August 1st, what exact amount you have, if you wanna cash out. Now, how much can you request through the U plan if you’re sending a distribution to a participating college?

It really kind of depends on what percentage of tuition you have purchased there. Um, but let’s say you have. A hundred percent or less. You want all those u plan funds to go. You can just say send all available funds. Um, so if you have 10% of tuition and fees for the year and you want to use that, just say send all the available funds.

You can also pick a certain percentage to go. So sometimes it’s the case that you wanna use. 50% of your, you plan this year, 50% of your you plan in a following year, et cetera. You can tell us what percentage, uh, of tuition and mandatory fees for the year that you want to pay, uh, or you can use a [00:18:00] certain dollar amount.

So all different ways that you could say either. You can either send everything, send a certain percentage, or send a certain dollar amount through the e plan. And if you’re cashing out, you can get either all the available funds or. A certain dollar amount. So those are the different ways you can specify there.

Now as to how the colleges actually received the funds, they kind of break down into two different categories. Ones that receive their, uh, you plan payments for the year in one lump sum, or ones that choose to get paid by semester. And so. For colleges that choose to get paid in one lump sum is pretty easy.

You just tell us what funds what, you know, how much you want us to send, or if you want us to send everything and we’ll send everything right away. For colleges that want to be paid by semester, it depends how [00:19:00] much money you have or what really what percentage you have purchased. So if you have a hundred percent of tuition and fees paid.

A college is going and you’re going to a college that wants to be paid by semester, then that’s pretty easy. We’ll send 50% of tuition and fees in, uh, in the fall at a date that the school has chosen, and then 50% in the spring at a date that the college has chosen. Chosen. So that’s pretty easy if you have fif, if you have less than 50% purchased.

Then the entire amount will be sent for a single semester unless otherwise specified. So if you have 20% of tuition, they’re just gonna send 20% of tuition in the fall, for example, unless you tell us to do something else. But if you have between 50% and a hundred percent purchased, so if you have [00:20:00] 75% of of tuition and fees purchased, you might think what we would do is split it by semester and send, you know.

32.5% of tuition and fees in the, in the fall or 32, and then 32.5% in the spring. But what we actually do is send 50% up to 50% in that fall semester to completely pay the fall semester, and then whatever is remaining. Goes in the spring semester. So in that case, if you have 75% of of tuition purchased, you would say you would get 50% of tuition and fees to fully pay for that first semester, and then 25% to pay half of the following years, uh, the following semester’s costs.

Um, that is of course, unless you want us to, to split it in a particular way, we’ll always do that. Um, I see a couple of questions here.

[00:21:00] Okay, so somebody wants to know what happens if the college is not on the list and is outta state. So if that happens, then you have a couple of options You can cash out, get what you put in, plus the interest, or you can hold the funds if you think that. If there’s a chance that the student may change his or her mind and transfer in to a, uh, participate in college, or you can transfer the funds over to another beneficiary, if you think that beneficiary within the family, uh, would, uh, there’s a chance that they would attend a participating college or university.

Uh, so those are your three options. Transfer, if that’s an option, hold or cash out and get. But you put in plus the interest. Okay. And another question, if you want to pay the balance of tuition and fees, do you request that amount or do you have to calculate the prepaid value of that [00:22:00] amount? That’s a great question.

I, I would strongly advise you not to do any calculating, um. Would you let us calculate, uh, the, the, the value. So if you wanna pay the balance of tuition and fees, you tell us the dollar amount that you would like us to pay, and we will calculate how much out of that account, uh, needs to be drawn to do that.

Thank you. That’s a great, great question. I’m glad you asked that. So, if you know that you need 20,000 and you’ve got, you know what, a lot more than that saved in the e plan, you just tell us. Send 20,000 to the college and we’d only have to take out, you know, 15,000 or so all hypothetical numbers, of course, uh, out of your account to come up with the 20,000.

But, but we do that math on our end.

All right, so that’s how that works for colleges that get. A split tuition, a split disbursement throughout the year. And frankly, there, those colleges are in the minority. [00:23:00] So there, there’s not as many of those as there are that get them, uh, in, in a lump sum payment. But again, if you want them dispersed in a particular way, you just have to let us know what that is, and we can do that.

So we can send, you know, a, a specific dollar amount every semester. Every month, whatever it is that you want. Most people tend to do it, you know, as infrequently as they can, but not everybody. So, but this is how things default.

Okay. Now thinking about students going into college in the fall. You’re thinking about the timeline. When do I need to do this? When do I need to do that? The first you plan, payments to a college are made on in the first Friday in August. [00:24:00] Um, so many colleges we know have payment deadlines before this date, or due dates for bills before the 1st of August.

So. For this reason, we are in contact with the participating colleges in the plan and pre disbursement rosters are available for all college administrators to access online. So as we’re getting requests to send funds out to colleges on behalf of students, we’re putting that request in the system. That goes to a report to the colleges.

The colleges can access that report and say, ah. I see Lisa Smith is getting, you know, uh, $2,000 from the U plan coming in August. So they’ll be able to check that and know that that money is coming from the, from the U Plan. Colleges are periodically notified by the U plan to check their roster for upcoming student disbursements.

Um, if you are caching out. [00:25:00] Getting what you put in plus the interest because the student is not attending a participating college. Um, then there’s, you know, less that the college can do, but, uh, they can’t verify, you know, the upcoming I. They, they can’t verify what the rosters on any upcoming distribution.

So, uh, cash out customers will have to notify financial aid offices themselves that this money is coming. And of course, you know, co you can always have colleges contact, um, MEFA and, and, uh, and we can verify our process as far as that’s concerned. Um, but again, that should be a pretty quick turnaround time from the 1st of August to, to getting your phones, depending on how you’re set up.

As far as how the funds actually go out to you for college distributions, colleges can either choose to receive their funds through, uh, [00:26:00] wire, EFT, wire or, or paper check. Um, and so hopefully your college is set up on a wire ’cause that’s a little bit quicker. College distributions are done every Friday, uh, and.

The notification of those are sent to designated administrators at college financial aid offices. So they’ll receive notification, uh, of their wires and, and distributions or paper check distributions. They’ll be able to look online and see which students, uh, are getting what from the U plan that week for cash out distributions.

Those will be sent either. Through mail check or deposited electronically into the owner’s bank account if the owner’s banking information is on file. So when I said that it can be done pretty quickly, it can be a quick turnaround time. If you have your banking information in the U Plan system and you’re getting [00:27:00] your distribution cashed out to you, it’s gonna be pretty quickly.

Um. Electronically sent to that account. Uh, and we don’t have to wait for Fridays on that. So those cash out distributions are sent throughout the week. Looks like I have another question here.

Oh no, I don’t apologize.

I so. I wanna talk about Postmaturity interest now and tax notifications. So I mentioned earlier that we can hold onto these certificates until about six years or so after they mature actually, uh, a fair amount longer than that typically, but, um, and that if used at a college. They cease to keep pace with tuition so that if you, again, using our example, if you have an account that matured in 2025 and you’re [00:28:00] using these in 2027, then um, at a college it’s going to be worth in 2027 what it was worth in 2025, although there is interest accruing on that certificate after it matured and so.

By law, we have to send this out to the owner in a check. Um, any post maturity interest goes out that way. It cannot be sent to a college. But, um, you should know that distributions of any kind, whether it’s to a college or cashed out to the owner, do not trigger tax forms or tax consequences. So, uh, this is Massachusetts State tax free.

Uh, and it is our bond council’s opinion that it’s also federal state, uh, sorry, federal tax free as well on distributions. Um, but [00:29:00] what is reported and what does trigger tax forms, uh. Is any post maturity interest over $10, or for that matter, pre-bond purchase maturity, if you have funds, say, sitting in the money market before, um, the bond purchase.

But for our purposes, for, for distributions here and for accessing your money. Any post maturity interest that accrued over $10 is reported in a 10 99 DIV to you. Uh, so you should check with your tax preparer for information on if that affects your taxes or not. We don’t know. It’s, you know, up to your pers it’s up to your situation and you should consult with your tax preparer regarding that.

But anything over $10 that accrues has to be reported to you. Now we have a question.[00:30:00]

Is there a way to request that a cash out distribution is paid directly to a non-participating school? No, there is not. Um, it has to go out to the owner. That’s a good question. I.

So any leftover funds from a current academic year could be held and used for a later year. Cashed out and used for other expenses. Remember, the e plan is locking in tuition and mandatory fees, but there are other expenses like room and board, books, supplies, equipment, uh, that are not part of that locked in percentage.

So it’s possible if you have leftover funds and you want to use, uh, them for that, you can cash that out and, and, and use. Your leftover, you plan funds for those expenses, or once again, they can be transferred over to another beneficiary. So oftentimes if there’s funds left over for an older uh [00:31:00] student, they can be transferred over to the younger sibling for their college expenses.

Uh, and once again, certificates that are held for later use or transferred, continue to accrue post maturity interest. But just to hammer that home, nothing about them changes. So their maturity year, that is the same. The purchase year is the same. Everything is the same except who the beneficiary is, who the student is.

So they’re, if they’re matured already, they’re not going to continue to keep pace with tuition. Uh, but once again, we’ll still be gaining post maturity interest. So that is how you can access your U Plan funds. This is our social media information if you wanna take a look at it. And this is our contact information.

That number is the U plan specific number there, that 8 8 8 5 9 0 5 6 5 3 where you can email us with any questions regarding your U plan or anything to do with paying for college at college [00:32:00] [email protected]. Um. I’ll hang around here. It’s a relatively short presentation, so, um, if you, we have time, if you have any further questions, let me know.

Okay. I. It looks like not. Thanks everyone.