There’s a new company on the block to help you save more money for college for your children. Called the Freshman Fund, it allow you to receive direct contributions to a 529 Plan, and is free for both the gift giver and the receiver. In the past, for most 529 plans, someone would either have to send you the money and you would have to write a check and send it in to your kid’s plan, or they would have to fill out a special form every time they wanted to make a contribution. Not really very convenient when it comes to gift-giving. The Freshman Fund takes care of that problem, and makes it simple for grandparents, other relatives, or friends contribute directly towards your child’s college education.
You now have an answer for the question “What should I get Johnny for his birthday“, or Christmas, etc. I don’t know about you, but it seems like my kids get a lot more toys than I ever did. Receiving a few less toys for their birthday or Christmas is not going to be a problem-for them or me. So if someone asks you what to get them, or you have a relative or friend who like to give them a check, cash, or a savings bond, you now have a place you can direct them that can help pay for your child’s education. This is a much better alternative than thinking up another toy suggestion that will will likely no longer be played with in a few months.
This also works especially great for relatives, such as grandparents, or others who might want to get the child a small gift and then give them a check or savings bond. Instead of receiving a Series EE savings bond (currently paying a paltry 1.40%), your child can receive a contribution to their 529 Plan. It can then earn decent interest and reap the benefits of compounding until your child is ready for college.
How does it work?
You sign up for a free account on the Freshman Fund website, and then link your child’s 529 Plan to the account. Don’t have a 529 Plan yet? The website will help you get started with information and direct you where and how to set one up.
Let people know where to go- Let people know that they can contribute to your child’s 529 plan by going to the Freshman Fund website. You don’t have to be pushy with this, but I will let my children’s grandparents know about it and that it would be preferred to a check or savings bond. I think most people will be happy knowing that their gift will be used for education. And if someone else asks what to get them, I will certainly let them know about the Freshman Fund.
I don’t know about you, but this sounded like a great idea when I first heard about it. As soon as I get my children’s 529 plans completely set up-which I have actually already started- I will be signing up with the Freshman Fund. I will update you on my experience with it.
Additional information-
- The website keeps your personal information private and encrypted, so you don’t have to worry about identity theft, etc.
- You can send someone without a 529 Plan a gift certificate, which the FF holds until they set up a plan-seems like a great way to get someone started!
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Slinky 10.01.08 at 1:00 pm
I use Utah’s plan for my nephew, and people can just send the money direct as long as they put his name and account number on the check.
RC 10.01.08 at 9:30 pm
@Slinky- Thanks for the info! It is good to know there are some 529’s that allow you to do that. That is certainly an option that many would appreciate.