Alternate Gift Giving: College savings account

Bay Area

SAN FRANCISCO (KRON) — When kids wake up on Christmas morning, they want to see toys under the tree and treats in their stockings.

But if you’re looking to make a more meaningful impact on your nieces and nephews, grandkids perhaps, it’s time to think outside the box.

One type of gift that might not be as fun in the moment but will make a huge difference later: a gift towards the cost of college.

Patricia Roberts is the author of “Route 529: A Parent’s Guide to Saving for College and Career Training with 529 Plans” and a mom who got her own son through college debt-free.

Roberts is a leading expert on helping families avoid or minimize student loan debt.

Roberts says because college and other forms of post-secondary education are expensive, a gift toward a 529 college savings account is easy to do and even small amounts of money given can add up.

When you think of giving a gift for the holidays, traditional ones like toys and clothing are often outgrown quickly in size and interest – while an investment in a child’s future is one that can increase in value.

A 529 college savings account is a special type of savings/investing account named after Section 529 of the Internal Revenue Code.

It grows tax free and CA’s plan is one of the most popular.

It’s called Scholarshare and can be used for many different forms of education after high school (two year, four year colleges and universities, trade and technical schools, graduate and professional studies across the United States and even across the world).

The money inside the account can cover the cost of tuition, fees, room and board, books, supplies, and even computers.

There are three ways to give a gift toward higher education:

1. Open their own Account.

With 15 minutes and $25, gift givers can open a 529 college savings account of their own for a child they care about and create a tradition of contributing to it for birthdays, holidays and other special occasions. You don’t need to be a parent of or even related to the child for whom you open the account. Any adult can open an account for any beneficiary.

2. Contribute to an Established Account. Offer to contribute to an account that a child’s parents have already established.

Most 529 college savings plans have simple-to-use tools in place that make it easy for account owners to invite friends and family to contribute to already-established accounts. By sharing a simple contribution bar code, loved ones can contribute to a child’s college account – rather than spending considerable time, money and effort searching for “just the right” gift.

3. Buy a gift card which can be redeemed into most any college savings account.

For gift givers who don’t want to spoil the surprise of a gift toward college, first-of-their-kind gift cards(available in retail stores and online) can be given which can be redeemed as an initial contribution to a new account or subsequent contribution to an already-established account.

For more information, visit ScholarShare 529 and Gift of College.

Copyright 2022 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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