This press release was developed and published in Maine media outlets and contains information pertinent to Maine families. Gift of College is available for a variety of 529 college savers and is not limited to Maine accounts.
Around the holidays, parents are increasingly willing to ask family and friends to consider alternative gift ideas, like college savings contributions, instead of traditional presents that kids may quickly lose interest in and that end up donated or recycled. According to a 2016 study by Fidelity Investments, 84 percent of parents said they would welcome college contributions instead of traditional presents. This holiday season, it is easier for Mainers to give the gift of college savings. Mainers can now make online gift contributions through the Gift of College1, an online registry that links gifts to 529 college savings accounts, including Maine’s NextGen College Investing Plan®. Or, they can pick up a Gift of College gift card at Toys R Us and Babies R Us retail stores in Maine.
“Gift cards take a lot of the worry out of what to buy, and are an easy and convenient way to give gifts today,” said Martha Johnston, FAME Education Director. “Why not take this familiar form of gift giving and apply it to college savings?”
The Gift of College cards can be used with any 529 account in the country, including Maine’s NextGen College Investing Plan, but are redeemed through the company’s website. The recipient must register for a profile at the site and link to his or her 529 plan account to redeem the card. Gift card denominations range from $25 to $200, and there is no expiration date for redeeming the funds.
That same Fidelity Investments study said that parents, friends and family spend collectively an average of $658 per child on gifts. “If a portion of the dollars spent on those gifts goes to higher education savings, it can help make a big difference over time and pay for education after high school, whether it’s a four-year college or trade program,” noted Johnston. “FAME wants to support families during the holidays while also helping them make the smartest financial decisions for their future. That’s why we want to encourage parents and grandparents to consider the Gift of College this holiday season. It will be a meaningful and life-long cherished gift.”
Johnston continued: “We know that children with savings are seven times more likely to pursue higher education2 and research shows that low and moderate income families with children with college savings between $1- $499 are 3 times more likely to attend college3 and 4 times more likely to graduate college.”
Anyone can open a NextGen College Investing Plan account for the special child in their life, regardless of state residency or household income with as little as a $25 initial contribution. A Client Direct Series account can be opened through NextGenforME.com. A Client Select Series account can be opened through an authorized financial advisor. Maine children born on or after January 1, 2013 also automatically receive the $500 Alfond Grant, which can be used to open a NextGen account without making an additional initial contribution. Once accounts are open, if either the account owner or the account beneficiary is a Maine resident, they may be eligible for additional grants, including:
- $200 Initial Matching Grant: A one-time $200 grant is available for eligible new accounts not opened with the Alfond Grant
- $100 Automated Funding Grant: A one-time $100 grant is available for eligible accounts that make at least six consecutive automated contributions through an automated funding option such as payroll deduction or a checking or savings account.
- 50% NextStep Matching Grant: Eligible accounts will receive a 50% match on contributions, up to $100 match per calendar year.
See Terms and Conditions for restrictions that apply at NextGenforME.com.
“NextGen provides families with a way to plan ahead for college, allowing them to realize their dreams and the opportunity to replace student debt with savings,” said Johnston. “We hope families will consider giving the gift of education to their loved ones this holiday season.”
2Elliott & Beverly, 2011; American Journal of Education.
3Source: Building Expectations, Delivering Results: Asset-Based Financial Aid and the Future of Higher Education (2013). The University of Kansas of Social Welfare, Assets & Education Initiative.