Getting An Early Start On Your Child’s College Fund
The average annual cost of college is a whopping $13,600 for public institutions and $36,300 for private institutions, and that price is only expected to increase in years to come. That being said, it’s not a bad idea to get a jumpstart on saving for your child’s educational costs.
One trend we’ve seen lately is that some parents are requesting 529 contributions in lieu of traditional shower and birthday gifts for the child. If you’re unfamiliar with the 529 plan, it’s an education savings account operated by a state or educational institution to help families set aside funds for their child’s education. There are different 529 plans available (including both savings plans and prepaid plans), and terms vary from state to state. Account contributions grow tax-free and can be withdrawn without paying capital gains taxes as long as the money is used for education.
A few startups have set out to make it easier for parents to solicit and accept contributions to their child’s college fund. Here are a handful of college fund registry services that we found. Note that before signing up for any of these services, it’s important to carefully research any associated fees and terms.
Parents can use GradSave to create a custom profile page for their child. GradSave encourages users to share their child’s profile via email and social media to encourage friends and family to contribute. Friends and family can contribute through the child’s profile page, and the registry can be linked to a 529 account. GradSave also offers a personal dashboard to track college savings progress.
College Registry from FiPath
With College Registry from FiPath, parents can set a college savings goal and develop a savings plan. Over the years, parents can invite friends and family to contribute to the savings goal. FiPath’s College Registry program can work with standard savings accounts as well as 529 accounts.
Ugift is the registry component of a larger college savings service called Upromise. Ugift itself lets account owners invite family and friends to contribute to a child’s college savings for birthdays, holidays and other milestones. Gifts are invested into the beneficiary’s 529 account, and anyone can contribute to a third-party enabled account as long as they have the account number.
For more tips on saving for college, check out our Student Loan Resource series.