[00:00:00] Okay. Yep, here we go. Okay, so again, this is our Using Your UPlan Funds presentation. This is for customers of the UPlan who have maturing certificates or matured certificates and want to use those funds, uh, either to a college or to themselves, and we’ll talk about the difference and, and, you know, how you do those things.

Uh, before we get started here… Oh, let me see.

Am I n- I’m not sharing, am I? Okay. Uh, there we go. That’s much better. Um, here we are. So before we get started, this is how you interact with the presentation. As you may be aware of this already as we’ve all been used to getting on Zooms for presentations, but, [00:01:00] um, just know that you can, uh, use the live transcript feature if you want to have what I’m saying captioned.

Uh, and also, if you want to ask questions, use the Q&A feature, not the chat. The chat’s been disabled, so, um, it’s much easier for me to see the questions as they come in through the Q&A. So, um, please, if you have questions, we’re a pretty small group, and we’re going through a pretty niche topic, so, um, we can be as conversational as you like.

So, uh, go ahead and continue to submit questions. Uh, I may address them as we go on. I may wait until, uh, after the presentation to do that if I think we’re k- coming to the answer. My name is Jonathan Hughes. I’m the associate director of college planning and content creation at MEFA. I’ve been at MEFA for a long time, over twenty years, and, and throughout that time have talked to probably thousands of families, uh, about planning, saving, and paying for college.

And I used to work, um, quite closely with the UPlan [00:02:00] when we did UPlan accounts in-house. Um, and so very familiar with the UPlan program. I, I like it quite a bit and, um, it’s one of the things that I really enjoy talking about is the UPlan because I think it’s a great program. Uh, so about MEFA really quickly.

MEFA’s the Massachusetts Educational Financing Authority. We were created back in 1982 by the Massachusetts state legislature, uh, with a public service mission to help families to plan, save, and pay for college. So the UPlan is obviously a way in which we help people to save for college, but, uh, we also do, um A fixed interest rate, educational loans, as well as a lot of free guidance and outreach, um, and counseling when it comes to how to pay for college and, and how to attend college and, and career as well, not just college.

So if you have any questions throughout this entire process, whether you have a child who’s just getting ready to go [00:03:00] off to school, or whether you’re a few years out, uh, or, you know, you are in the very early ages of exploring, or your student is, what they wanna do after they graduate high school, uh, we are a free resource for you to use for any questions related to any of those topics.

So I want you to think of us that way. Um, certainly if you have questions about your UPlan, we can help you with that, but really as in a broader sense, we’re here to help you with the– these questions. Now, what we’re gonna talk about today, when to use your UPlan savings. So we’ll talk about sort of the calendar of how things become available and, and when you should be talking to us, and when we’re gonna be sending funds to the, to the college or to you, talking about requesting a UPlan distribution, the different ways you can do that.

Um, we’ll go over the participating colleges, how to calculate the value of your UPlan savings, how much you may request, uh, the difference between sending funds to [00:04:00] colleges versus, uh, cashing out to an owner. And, uh, we have a new online, uh, portal this year, and we’ll go through how you can actually process your distribution, uh, request, uh, online.

And then we’ll talk about, uh, what happens after you make that, uh, request, and, and so if you have leftover funds and, and how post-maturity interest is treated. Okay. So when can you use your UPlan savings? If you’re participating in the UPlan, you have funds, they are tied to a maturity year. And so probably all aware of this, but, uh, you know, you’ll, you’ll see when your funds mature on any statements that you get from the UPlan.

And certificates mature on August first of their maturity years. So, uh, you can begin [00:05:00] to direct your funds in May, so you can do this now. If you have something that is maturing August first of twenty twenty-six, those funds are not liquid yet. They’re not available. Remember, the UPlan is in a bond, and the bond doesn’t become liquid until it matures on August first.

But you can Let us know where you would like those funds directed, whether that’s to a college or whether that’s to, uh, you, or whether you wanna hold the funds. Um, you can, excuse me, let us know, uh, of your plans. Now, UPlan funds are dispersed throughout the year on Friday, uh, but only matured certificates can be dispersed through normal procedures.

So if you have, uh, certificates that mature in 2027 or 2028, you’re really not able to request that those funds be sent to a college or cashed out through normal procedures. There are, um, specialty circumstances like, uh, [00:06:00] early withdrawals or, or early cash outs that you can request, but again, that is a special procedure, not part of the normal UPlan distribution.

So we send funds out, as I said, every Friday. Um, but… And you can, you can distribute funds that are matured throughout the year. So if you have accounts maturing Aug- August 1st of 2026, um, then those begin to be dispersed the first Friday in August, and then can continue to be dispersed, uh, throughout the year or subsequent years.

So, uh, if you have accounts that are currently matured, you could cash those out or send those to a college. So anything with a 2025 or prior date, those can be distributed. Um, August 1st is the first date for, uh, or the first Friday in August is for 2026, a- and then going forward every Friday after that.

So how you can actually request your funds, you can [00:07:00] go online, which we’ll show you how to do and request distributions, or you can call and process one of those over the phone, and that number is 888-590-5653, and you’ll speak to a UPlan representative, and they can, uh, act on your distribution wishes.

Now, when you’re making a distribution request, uh, there are three general sort of possibilities as to how you can proceed. The first is sending funds to a participating college, and that when you do that, um, your funds are going to be worth whatever percentage you locked in the year that you put the funds in, um, what that percentage is worth in the maturity year.

Uh, and so that is sort of the, the point of the UPlan to lock in percentage, uh, I’m sorry, to lock in tuition, um, of the year that you put in and keep pace with the increase in [00:08:00] tuition as tuition increases. You could also cash out to the owner. In that case, if you do that, what you get is what you put in plus the interest.

So it’s not worth the percentage of tuition, it’s what you put in plus the interest which accrues at CPI. Um, and you would get that sent to the owner. Only the owner can request that, and those funds go out directly to the owner on the account. Now, if you’re not sure how you wanna use the funds, if the student’s, uh, plans have not finalized, or if they’re going to a non-participating college but you think that they may end up going to a participating college, you can hold these certificates.

And so you can send us ba- you can let us know to hold. Or if you don’t make any choice at all, obviously the, the accounts will be held. We’re not gonna process anything without you telling us to do so. Um, and you can hold these certificates up until about six years after maturity. Now, [00:09:00] if you have a, a beneficiary who may not use these funds the way you intended, but another beneficiary within the family may, you can transfer those funds over to that beneficiary.

But again, the maturity year does not change, and so you would have to make a decision on how you wanna use those funds after about six years after the funds mature. So just to re- to reiterate, your distribution options are: send funds to a participating college for a percentage of the tuition and fees, cash out to the owner what you getting in– what you put in plus the interest, and then hold for later use.

Um, I’ll leave this up here for a minute. These are… This is the list of participating UPlan colleges and universities.

So if you see your college there, um, you know, you can send those UPlan funds [00:10:00] for a percentage of tuition.

And so I know something that a lot of you are probably thinking about now is, “What is the actual dollar amount that the percentage is going to be worth at a participating college?” So you probably have, um, statements from the UPlan that reflect what percentage of tuition you have purchased at each participating college, um, versus ca- or, or, you know, maybe you’re looking at the cash value for cash out distributions.

So for school distributions, again, certificates that mature August 1st of 2026 will be worth a percentage of the upcoming year’s tuition and mandatory fees. So let’s say you have 50% of tuition, uh, for, for, a August 1, 2026 maturing certificate, you know, your funds will be worth 50% of tuition and mandatory fees at whatever tuition, uh, and mandatory fees are at that college for 2026.

Now- The request has been sent [00:11:00] out to colleges to give us their tuition and fee figures for the upcoming year, and we are currently, uh, soliciting those from colleges, and some colleges have gotten them back to us and, and some haven’t. Until we get that information from your particular college, we won’t know exactly how much your UPlan funds are worth.

We’ll have a percentage. You know, y- we can have last year’s, um, tuition and fee figures, so we can get a sort of ballpark about it, but we won’t know for sure until the actual tuition and fee figures get sent to us by those colleges. So we’re receiving those throughout the summer. Um, so you may have to estimate, but contact us, again, at that number 888-590-5653.

Uh, and you can check on whether or not the college that your student is, um, planning on attending has recei- has sent us back the tuition and fee figures. If they have, we can, uh, sort of get the value based [00:12:00] on your percentage, um, of, of what the UPlan will pay. For cash out distributions, you’re going to receive, again, what you put in plus the interest.

You should have received from us, you know, the running total of what you put in plus the interest is through this time. Uh, that’s not exactly what it will be worth because CPI is assessed every August first, so there will, will be another round of CPI that gets assessed on any August first 2026, uh, maturing certificates.

Um, so we won’t know until August first, but you have an idea of at least how much you’ll be getting, um, by checking your, your balance or consulting with your statements.

Now, as far as how much you can request, if you’re requesting a cash out to owner, you can request anything that’s available, which is, you know, what you put in plus the interest that’s currently matured, or you can select just a portion of that. You [00:13:00] know, if you have $2,500 available and you only need a thousand, you can just request a thousand be sent out to you.

Uh, if you’re sending distributions to a college, you can send, again, everything that is available up to 100% of tuition and mandatory fees. Um, if you don’t need that much, you can tell us to send a certain amount to a college. So, um, and this can be confusing because people think, well Do you mean what amount of the money I put in or do you mean what the college is asking for?

Essentially, you know, if you have a, a balance at a school that is due and you have more than that in your UPlan funds, just tell us the amount that you need us to cover, uh, from the college and we will figure out how much we need to take out of your account to come up to that amount. So, you know, if you need us to pay $10,000, um, a- and that is, [00:14:00] uh, represents a percentage of tuition, we’re not gonna be taking $10,000 of what you put in and sending it to the college.

We’re gonna figure out how much we need to take out of your account to come up to the $10,000. So we’re gonna factor in that UPlan growth, um, when we do that. You can also, uh, pick a certain percentage. So if you have, uh, a lot of money in your, uh, that’s in one year and you want us to take a percentage of what you have saved and use that, you could say, “Take 25% of what I have saved and send it to the college,” you can do that as well.

Uh, but if you, again, if you’re requesting a certain dollar amount, use the final dollar amount that you would like paid to the college when you’re requesting.

Okay. Oh, someone has a question. Lovely.

[00:15:00] Okay. Uh, this is a long question. I’m gonna wait until after, uh, this, uh, is through. Um, and, and we can talk offline about this. Seems like a specialized question, but, but I will, I will address this after the presentation, if you don’t mind. So, um, as far as the timing of college distributions are concerned, when you need to start doing these, the first UPlan payments, as I said, to a college are done the first Friday in August.

Colleges actually set their own default dates, um, but the first time we’re able to do and the first time for many colleges is the first Friday in August, and this can be a challenge because we know that many colleges have payment deadlines before this date. So if you’re, uh, j- especially if you’re just going into your first year, you know, you’re gonna be looking at a, at a payment due date that may be concerning because it’s before August 1st and, and what do you do?

Um, so to let you know what’s happening behind the scenes, [00:16:00] we are collecting, um, the distribution requests from our customers and processing those. These are, uh, able to be viewed by colleges as they log into the UPlan portal so they can see which of their students- Have sent in their UPlan requests and, and what amount they are likely to get from the UPlan.

Um, and so they can take a look at that. We also have a- at a certain point throughout the summer a pre-disbursement roster that is sent to colleges that have all the students and, and, you know, that we’ve received distribution requests from, and again, what they are scheduled to get and what amount they’re likely to receive.

So they’re periodically notified by the UPlan to check their roster for upcoming student disbursements. Um, so they should be aware that money is coming from the UPlan even if they don’t have it yet, and they should be aware of about how much is coming. Now, if you’re [00:17:00] cashing out and sending, uh, you know, i- if you’re cashing out to the owner, if your child is not attending a participating college, uh, we really can’t communicate with the schools in the same way.

Um, so you would have to get in touch with your financial aid offices and notify them that money is coming in from the UPlan to you, and you’ll be forwarding funds to them.

Um, one other wrinkle that I wanna talk about when it comes to UPlan distributions to colleges, I mentioned earlier that colleges set up their default disbursement date. That is the date that they want, um, the UPlan to send them funds. Some colleges have elected to receive one UPlan payment per year, or at least one default UPlan pa- payment per year because the UPlan, you know, is set on the yearly tuition.[00:18:00]

Um, you know, they, they can take whatever it is and, and hold, you know, funds and apply per semester and, and apply the second semester when that arrives. Some have decided to split their disbursements per year and get paid per semester. So, um, you know, they would have two default dates, you know, one, for example, in August and maybe one in, in December.

Um, that’s fine, but when you’re… That can affect how you are requesting UPlan distributions, um, if you’re going to a college that has two disbursement dates per year This is why. Um, how we send the funds to that college depends on how much you have saved. So for example, if you have 100% of tuition and fees, so you have the entire thing paid for by the UPlan, you tell us, “Send everything that can go to, um, UMass,” and their [00:19:00] default dates we know are, you know, sometime in August and sometime in December.

Great. Then we’re gonna take what we’re gonna send to that college and split it 50/50, right? ‘Cause you’re having everything paid for that can go through the UPlan. So let’s say it’s 20,000, that’s 10,000 in August, 10,000 in December. Easy. Um, if you have less than half, if you have less than 50% purchased, let’s say you have $2,000 and you say, “Okay, that’s going.”

You say, “Just send it to UMass.” Okay, then we’re gonna send that all in the first semester. We’re not gonna split that disbursement because it’s, it’s less than 50%, so we’re gonna send everything that can go towards that first semester, unless you say otherwise. You know, you always have the final say on this.

If you want us to send half of what you have now and half of what you have la- later, regardless of what it is, you can do that. But just sort of this is default what we’re going to do. So if you have less than 50%, all of that will default to going in the [00:20:00] first semester. If you have between 50 and 100% of tuition saved, then what we’ll do, we’ll default to, is sending 50% in the first semester to completely pay what we can for that first semester, and then whatever is remaining will go in the second semester.

So if you have 75, or let’s say 70% of tuition saved, we’re not gonna split that 70% and send 35% in the first half and 35% in the second half. We’ll send 50% in the first semester, and then the remaining 20 in the second. Again, to, to, to pay that first semester in full, and then whatever’s remaining. Now again, you can tell us to do otherwise, and we’ll do it, but that is how we default to, to sending funds.

And one other final point, um, we can’t send to a college more than 100% of tuition and mandatory fees for their academic year. It happens sometimes that people have over 100%, uh, saved, and they want [00:21:00] us to send, you know, the value of 120% or, or, you know, whatever it might be to a college. We really can’t. We can only send up to 100% of whatever tuition and mandatory fees are in that year.

Okay, now I’m gonna walk you through requesting an online UPlan distribution. And the way you would do that, go to mefa.org/uplan, and you click in Log In here on this page. You’re gonna come up to this screen here, and assuming that your Already set up with a, a user ID and a, and a password for the, uh, online system.

You go into that part down at the bottom there, put in your us- your user ID and your password, and you’ll come up to this here, which is your main page for your account. So it’ll show all the accounts that you have, and what you’re gonna wanna do is go up to Financials, [00:22:00] click on that, and you’ll get the drop-down box, and then you can click on Redemptions.

Now, when you get to Redemptions, you’re gonna see, if you have more than one account, let’s say if you have more than one beneficiary, you’ll see all of them there. Uh, if you just have one, you’ll just see that one. But, uh, click on the account that you would like. That’s gonna come up to how you want these funds distributed, and you can go to Account Owner for a cash out or to a university or college.

Now, let’s say here we’re gonna select University or College, so we do that, and we select our college at UMass Amherst, and you confirm that. And now, I don’t know if you can see this, but we’ll– I’ll try to sort of enlarge this here. So you’re gonna go to the Redemption screens, and, and what you have to figure out here is, you’ll see here these drop-down boxes.

Excuse me. Um, [00:23:00] academic year for twenty twenty-five. You can list the student ID. That’s optional, and a lot of people don’t know the student ID, but if you do, you can put it in, so that just makes it easier for the college to match the funds to the student. Location in state, that means are you an in-state or an out-of-state resident, which affects your tuition.

And then on campus or not. And now at the bottom here, you can see here’s the tuition amount for the year and the fee amount so… and then the total. The tuition and fee figure is here, and it’s eighteen thousand forty-seven. Redeem by amount or redeem by percentage of tuition. So again, if you’re, if you’re gonna use everything that you have in the account, you could say, “I wanna use a hundred percent of tuition.”

If you want a dollar amount, you tell us what that is there. And it looks like in this case we’ve chosen redeem by percentage of tuition and picked a hundred percent. [00:24:00] Okay. And now we see what that looks like here. So Action, Transaction Date, Transaction Type is Pay to School, Description is UMass Amherst, and then the Tuition Value being eighteen thousand four eighty-seven.

And now we see here, “Your redemption request has been successfully submitted.” And that’s generally how that works, so it should be very easy to do. Okay, now how the UPlan funds get sent

Oh, somebody wants to know, uh, my child is going out of state. Do you have to do this for each certificate when cashing out? Let’s say you have six certificates maturing August 2026. Would I do this selection six times? No, you shouldn’t have to do that per certificate. You do per account. Uh, so you tell us how you want the funds, uh, distributed, and we figure out the order and how to do that.

Thank you [00:25:00] for that question. Um, how UPlan money gets sent. So colleges– Well, for sending funds to the college, they get funds, uh, in one of two ways, and that is either with a paper check or by, uh, ACH sent to them. So, and how that is done is up to the college. Uh, we prefer the ACH sent to the college. It’s just much easier for us, um, to do, and the funds get there quicker, and everybody’s happy and, and I think that that is something that colleges are increasingly selecting as well, although many still get paper checks.

We’re working on getting as many on, uh, electronic payments, ACH, as we can. Uh, we send funds to colleges every Friday, and that roster for the week, um, i-is set earlier in the week, around midweek. Um, but, uh, but that is sent every Friday, and colleges can go onto the UPlan administrator site for themselves and look and see their rosters and see [00:26:00] which funds are, uh, coming.

Now, for cash out distributions, the, it works generally the same. We distribute on Fridays as well. And cash out distributions can be sent via mail check to the owner or deposited electronically into the owner’s bank account if they have submitted that banking information and we have that on file. Um, but again, it can only go to the owner on, uh, on record

So PMI and tax notifications. Certificates that have, uh, matured… Now remember, we can hold onto these accounts until about six years after they mature. It– The, the value at a college does not continue to increase with tuition once it has matured, but there is interest that continues to be added, uh, to the investment, to the bonds, and that is at what’s, is called [00:27:00] post-maturity interest.

Um, any post-maturity interest, any interest that’s accrued after maturity, is always cashed out to the owner, even if we’re sending funds that have matured in a previous year to a college. It’s worth what it was worth in the maturity year. That’s the amount that goes to the college. Any value that accrued after that gets sent out in a check to the owner.

Um, so that’s just a, a, a legal, uh, thing. It’s just something that we have to do. Uh, now you can turn around and send those funds to colleges if you like, but we have to cash it out to the owner. Um So UPlan distributions do not trigger tax forms, so that’s good news. But post-maturity interest that accrues over $10 is reported in a 1099-DIV to the owner, and that may or may not affect your taxes.

It really depends on your individual circumstance, so you need to check with your tax preparer for [00:28:00] information on, you know, how that is going to affect you. Now distributions, as I said, don’t trigger tax consequences, but over $10 accruing of post-maturity interest will need to be reported to you, uh, and then you check with your tax preparer.

Now, if you have leftover funds, uh, after sending funds to a college or cashing out, um, any funds left over from a current academic year can be held and used for a later year. They can also be cashed out and used for other expenses. So remember, the UPlan doesn’t account for when it’s sent to a college, doesn’t, uh, pay for things like food and housing or, uh, books and supplies.

It’s just tuition and mandatory fees. So if you have funds left over and if you’re going to have funds left over every year, you know, you, you may wanna do that. Um, but if you have funds that you wanna use in a later year, you can just hold and use them in a later year as well. Or again, they can always be transferred over to another [00:29:00] beneficiary within the family.

That’s always an option. Um, certificates that are held for later use or transferred will continue, as I said, to accrue post-maturity interest. But if used at the college, they’ll still be worth their value at maturity. But you’ll get that post-maturity interest sent to you, uh, in a check. Um, other ways to pay for college, so, um, current income, right?

So college payment plans. The reason that we break it down to current and future income is that we say, you know, once you’ve done your financial aid and you get your financial aid from your colleges, there’s three ways that you can pay for college. First is past income, meaning any savings that you have.

So let’s say the UPlan represents that, that past income or that savings. Current income is what you’re earning when your student is going to college. And so colleges typically offer monthly payment plans, so, uh, those are often interest-free with a one-time em- time enrollment fee. They– It’s like a [00:30:00] five to 12 month, uh, schedule depending.

So you calculate the amount that you can afford to pay every month and based on, um- Based on that, that’s your monthly payment. So let’s say it’s $200 a month, and you’re paying over 10 months. That’s $2,000 you’re paying against tuition, uh, $2,000 that you’re not, uh, borrowing essentially. So you wanna contact the Financial Aid Office for m- more information about that.

And then, of course, once you exhaust everything else, the only thing that’s left is your future income or your loans. So, um… And I know borrowing is, is, is a, a loaded topic, right? And it’s something that everyone is really concerned with. Um, and, you know, you might wanna make sure that you’re borrowing wisely.

The first step to doing that is to borrow the Federal Direct Student Loan first. Make sure the student takes those loans before moving on to any other types, uh, because they’re just the best options for students. They’re the only loans that’s considered financial aid. [00:31:00] Um, your private loan or alternative loan options, the interest rate on those will depend on your credit score.

So maybe it’s not a bad idea to take a look at your credit report, make sure that everything on there is, uh, accurate, and that there’s nothing that’s being reported that is negatively impacting your credit score that shouldn’t be there, that’s there, uh, um, by mistake. And that happens, um, fairly frequently, so y- you want a couple of months, maybe two months to, to get that s- sorted if, if that’s the case.

Um, when you’re looking at interest rates from different loan lenders, don’t just look at the teaser rate, which is the really low rate, which is the rates are as low as blank. If it’s as low as what, what’s it as high as, right? So take a look at the spread. Is it a really wide spread? Is it as low as 3% and as high as 20% or 16% or whatever it may be?

If you’re gonna fall in the middle there, [00:32:00] um, you know, think about that versus a loan that might be low as 6% and as high as 9%, right? If you’re gonna fall in the middle there, what might that be? That might, that might look different. Um, and then we, uh, you know, take a look at interest rates, fixed or variable, um, any fees.

Uh, what’s the deferment? Do you have to start paying immediately? Um, who’s responsible to repay? Um, MEFA offers fixed interest rates with a narrow credit, uh, range. Uh, I’m sorry, with a narrow interest rate range. Um, so just something to think about as you move forward. Connect with us on social media, Facebook, Instagram, X, LinkedIn, YouTube, our podcast.

Um, I am gonna s- answer some questions here. Uh, this is our contact information. I’ll leave that up. I’m gonna stop recording[00:33:00]

if I can

and answer some questions here