MONEY college costs

4 Tips to Save Big on College Textbooks

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Dave and Les Jacobs—Getty Images

And even get a tax break.

With a fresh crop of college classes comes another round of wallet-crushing textbook shopping.

The high price of the textbooks is news to no one. For years, students and parents have been shocked by their price tags, with a single book for one course routinely topping $200. Earlier this year, the news broke that prices have surged 1,041% since 1977.

It may be surprising, then, to learn that on average, students spent less on textbooks last year than they did the year before. In fact, the $563 students spent on books in 2014-15 is 20% less than they spent in 2007-08, according to the National Association of College Stores.

That’s thanks in large part to the growth of rental companies and digital books. Renting, or buying used, can reduce the cost of a title by one-third to one-half, according to the association.

But while all the new options may mitigate the problem, they don’t solve it, says Ethan Senack, higher education advocate for the U.S. Public Interest Research Group. Alternatives aren’t always available, and ultimately, their price is still based on the cost of the brand new print editions, which have gone up every year for the past 30 years.

A 2014 report Senack wrote found that 65 percent of students had decided not to buy a book because it was too costly, even though most thought that was harming them academically.

Four tips to help cut your textbook tab:

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1. Ask the prof.

Before you even start shopping, check with your professors to make sure they’re really going to use all the books on the class syllabus. Often, they may plan to use only a few chapters of a text, and that can make your decision about whether to buy the book or look for a copy at the library much simpler.

2. Use comparison tools

Several websites can help you compare the prices at multiple sellers with one quick search.

The University Network’s Textbook Save Engine, for example, says it will find the lowest prices on the Internet, turning up rentals or used titles that are an average 85% off the original price. (We spot-checked a handful of titles and found the rentals do consistently offer savings of more than 80%, while used and new editions had smaller, but still significant, discounts.)

Another site,, will provide a side-by-side analysis of prices and buyback history to help you decide whether to rent or buy, based on how much the book is forecast to be worth in six months. The website also will search local library listings by zip code for free options.

More campus bookstores also are offering this type of comparison shopping. At least 350 college stores have tools on their websites to compare their prices with those of other major sellers or renters, such as Amazon and Chegg.

3. Know these traps

When you’re shopping online, use the ISBN number on the book to be sure you’re getting the same edition as you would in a bookstore. If you’re buying used, check to make sure there are no online access codes that you’ll be forfeiting. And if you’re buying a digital book, bear in mind that it may available for only a set number of days and could have restrictions on the number of pages you can print.

Finally, check the return policy. Most campus bookstores allow full returns up until the end of the college’s drop/add period. But you may lose that flexibility with a title purchased from a less expensive online seller.

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4. Saves your receipts for tax time

Students (or their parents) can get a tax credit for money spent on textbooks through the American Opportunity Tax Credit, which will defray up to $2,500 spent on out-of-pocket college costs, including course materials, fees, and tuition. To qualify, single filers must have an adjusted gross income under $90,000. For couples filing jointly, the tax credit phases out at an AGI of $180,000.


A New Way to Define ‘Affordable’ College

mortarboard with price tag
Sarina Finkelstein (photo illustration)—Shutterstock (2)

Everyone talks about affordability, but what exactly do they mean?

During a higher education hearing on Capitol Hill last month, Lumina Foundation CEO Jamie Meritosis made a telling observation: While nearly everyone agrees that higher education has become unaffordable for many families, few can define what “affordable” actually means.

“It’s an eye of the beholder issue for us right now,” he added later.

Today the foundation, which focuses on higher-ed issues, is out with a suggested formula for determining what’s affordable. It would be the amount families could set aside by saving 10% of their discretionary income for 10 years, plus what students could contribute from working 10 hours a week while in school, or $14,500 over four years at current minimum wage.

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Most conversations about affordability focus on college prices, then available grant aid, and finally, what students are left to pay, the Lumina paper says. Instead, this “Rule of 10” proposal aims to reverse that by first defining the maximum amount students can reasonably be expected to pay, and then encouraging colleges and policymakers to use that as a guide in setting prices or designing aid programs.

The proposal is set up as a sliding scale, so that families who earn more would be expected to pay more. And in recognition that some families can’t afford to save 10%—or anything, for that matter—those with an income below 200 percent of the poverty rate would be exempt from the savings part of the contribution. (That would be a household income of $48,500 for a family of four, under current poverty rate guidelines.) Following the formula, a family making an average of $100,000 annually would be expected to save $429 a month for 10 years, or $51,500 in total for college costs.

The Rule of 10 was designed to be easily understandable, Lumina says, unlike the complicated formula the federal government currently uses to determine expected family contribution.

But that also means it may be unrealistically simple. There’s little mention of how much families would contribute from current income while a student was in school or what an acceptable amount of loans would be, aside from a suggestion that those families who don’t meet the savings guideline could be expected to make up the difference through current earnings, additional work, or loans. Another option, according to the paper, would be using the same formula to set the maximum amount of loans a student should be expected to borrow.

“The idea behind this framework isn’t to create a one-size-fits all approach, but rather to provide guidelines that can be easily understood and tailored to individual students,” said Zakiya Smith, strategy director at the foundation, in a press release.

To demonstrate that, Lumina compares college costs to housing costs. The general guideline is that housing shouldn’t eat up more than 30% of income. But while that’s a goal, it’s certainly not applicable for every household. The same will be true of college savings, the paper says.

And like housing affordability, agreeing on a definition of affordable is helpful, but it isn’t the same as finding a solution for how to pay for all the costs that go beyond what’s affordable.

MONEY College

Students Are Totally Clueless About Financial Aid and It’s Costing Them a Lot of Money

Text books and money
Getty Images/iStockphoto—Getty Images/iStockphoto

A new report says better outreach and simpler financial aid information would help students choose the right college and know how to pay for it.

Planning for the unknown is hard. But when the “unknown” is how much college will cost and how to pay for it, experts say some students become so discouraged they never even apply.

That’s why the findings in a report out today from the New America Foundation are concerning: Nearly a quarter of prospective students surveyed said they were unsure whether they’d receive financial aid, even though nearly nine out of 10 said the cost of college or availability of aid were important factors in deciding which school to attend.

The report, “Familiarity with Financial Aid,” is part of a series of papers based on a survey that looked at various aspects of college decision making, including how students choose a school and pay for their education.

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The survey found that students were most familiar with scholarships they receive from a college (82%), student loans (79%), and state scholarships or grants (61%). Less than half, however, knew much about Pell Grants—the federal grant worth $5,775 this year that’s given to low- and moderate-income students—and only about a third knew other ways to make college costs more affordable, including tax deductions and federal work-study.

Of the undergraduates who filed for federal financial aid, 92% with family adjusted gross incomes of less than $50,000 were awarded a Pell Grant, according to data from the U.S. Department of Education. Yet in this survey, 48% of students in the same income bracket weren’t familiar with the Pell Grant, including more than a quarter who’d never heard of it.

Knowing about the “free money” that’s available to them could change where low- and moderate-income students apply to college or whether they apply at all, said Rachel Fishman, a senior policy analyst at New America and the paper’s author. Pell Grant status also is used as a qualifier for many state and school aid programs, so receiving a Pell Grant often opens the door to a lot more money for school.

The paper supports allowing families to use older tax information when applying for financial aid, a policy proposal that’s gained significant support among college access advocates and some lawmakers in the past year. That change would make it possible for families to complete the Free Application for Federal Student Aid (FAFSA) earlier.

Other initiatives that Fishman says could improve students’ familiarity with financial aid include early commitment programs, which would tell students what type of aid they’d qualify for as early as 8th grade, and an improved system of net price calculators to give them an estimate of how much they’d have to pay at a particular college based on their family income.

Only 14% of students said they’d used a net price calculator, and half of survey respondents said they’d never heard of the calculators before. While the Education Department has net price data on its College Navigator website, Fishman said it would be more helpful to provide a more personalized formula, rather than the broad income brackets that the federal information is based on now. Likewise, colleges are required to publish a net price calculator, but finding it often requires digging through multiple pages of a website. Fishman suggested creating a single website where students could submit their financial information once and then see cost estimates from all the colleges they’re interested in.

“For lot of these resources, students have to have to the savvy to go out and find them,” Fishman said.

Interestingly, while the majority of students in the survey said that they’d found high-quality information regarding financial aid, 63% of respondents also reported feeling lost at some point during their research.

Fishman thinks that’s indicative of how complex financing higher education has become, with grants, different types of loans, and seven loan repayment plans.

A simple web search will return a ton of information, Fishman said, but “students still leave confused because it’s such a complex, confusing system.”

For help navigating that system, check out MONEY’s College Planner, which has news and advice about applying to and paying for college.


Families Are Paying More for College…and That’s a Good Thing?

graduation cap mortarboard on top of pile of cash
Getty Images—Getty Images

Mom and Dad have started kicking in more cash, a possible sign of greater confidence in the economy.

Talk about looking on the bright side. A new survey says families spent more on college last year, and that could be a good thing.

Sallie Mae’s annual “How America Pays for College” survey does indicate that families spent more, in part, because college costs continue to rise. But the fact that contributions from parent income and savings increased by an average of $1,391—more than any other source of college funding—suggests they’re becoming more willing to part with their precious cash. Coupled with survey results showing families less worried about job losses and falling home values, that could be a sign of an improving economy, according to the study.

The survey found that families paid $24,164 on average toward college in the 2014-15 academic year, up 16% from last year and the first statistically significant increase in the past five years.

Increased spending was consistent regardless of the type of school or a family’s wealth. But the $24,164 average still conceals a lot. Families with students at four-year private colleges, for example, spent the most at $41,857—almost double what families spent on four-year public schools ($23,189) and more than triple the figure for two-year schools ($13,531).

For families earning more than $100,000, parent income and savings covered 45% of college costs, compared with 28% for the middle-income families and just 20% for families earning less than $35,000.

Four out of 10 families said they took out loans to pay for college, and the average amount they borrowed was also higher than last year.

Interestingly, the survey suggests that families who borrowed didn’t do so for basic access to higher education, but so that their student could attend a more expensive college. Borrowers spent a third more on college than those who didn’t borrow, and their students were more likely to be enrolled in private colleges.

The numbers are based on the responses of 1,600 families with at least one 18- to 24-year-old college student.

For advice on paying for college and our latest college rankings, check out the new MONEY College Planner.

MONEY Retirement

College or Retirement? How to Save When You’re an Older Parent

Amble Design—Shutterstock

Women in their 30s and 40s are having more babies. But a unique set of financial challenges are waiting.

For the first time in seven years, more Americans are busy making babies.

The National Center for Health Statistics recently reported that the birth rate rose 1% in 2014, the first time since 2007. The seven-year decline has been attributed to the deterioration of the economy during the Great Recession—unsurprising when you consider that the U.S. Department of Agriculture estimates you’ll spend $245,340 to raise a child to age 18.

Women in their 30s and 40s have led the baby bounce-back, with birth rates rising 3% year-over-year for women ages 30 to 39. Birth rates for women in their early 40s rose 2%.

While the uptick suggests parents are feeling financially secure enough to start raising a family, later-in-life pregnancies do come with their own set of financial challenges.

Resetting Your Priorities

One of the hardest things for couples to do when they have kids later in life is to re-evaluate their budgets, says Mitch Kraus, a financial planner in Santa Monica, Calif. “Most people struggle in their 20s to get by, then in their 30s they’re in a decent career and making some money and they get used to the niceties in life,” he says. All of a sudden, money that went to spontaneous weekend trips or eating out has to be allocated towards child-care expenses and diapers.

Having had his first child when he was 38, Kraus knows that resetting those financial priorities can be easier said than done, especially if you’ve grown accustomed to a certain lifestyle.

“I hadn’t made dinner two nights in a row in 10 years,” he laughs. “It’s hard to transition back to some of these things.”

Of course, the demands on your money will vary depending on your kids’ age—and your own.

If baby is already on the way, start budgeting during your pregnancy. Many parenting sites have baby cost calculators to help you wrap your mind around just how much Junior will bite into your vacation fund. Pre-delivery is also a great time to revisit your life insurance policy to make sure your family would have the financial resources they need if you’re not around.

Once the baby is born, one of the most pressing concerns (especially for working couples) is daycare. A report last fall by Child Care Aware America found that in some states, the cost of full-time childcare is more than a year of in-state college tuition. (Exhibit A: New York, where daycare can cost $15,000 but in-state tuition and fees at a public college is about $7,500 a year.)

Andy Tate, a financial advisor in Minneapolis, Minn., reminds parents to view the cost of childcare and education as a fluid expense instead of separate costs. Once Junior goes to elementary school, you can reallocate most of the daycare money to a college savings account. Socking away some of the money you had been spending on daycare can help you catch up on college savings.

Balancing Your Own Needs

But what about saving for you? Perhaps the trickiest financial issue for older parents is finding a way to fund ever-approaching retirement and a child at the same time. Someone who has a child at 35 or 40 will find tuition bills coming just as they may be preparing—and saving in earnest for—retirement. A recent poll by T. Rowe Price found that 52% of parents prioritize college savings over their own retirement. While that may make sense emotionally, it’s not always a good move financially. “You can take out loans for college,” Tate explains, “but you can’t for retirement.”

One strategy to consider: don’t put too much money into 529 college savings plans, Tate suggests. Though they are great options for younger parents with a longer time horizon, older parents need more liquidity and may be better off putting their money into other options such as a typical, non-qualified brokerage account. You’ll miss out on the tax-deferred status of a 529, but Tate argues that a well-managed account can help you minimize tax consequences while providing greater flexibility to use the funds for other expenses (such as your son or daughter’s wedding).

What’s more, putting your money into retirement savings instead of a dedicated education fund could help your child get more grants and low-interest loans. Many financial aid programs don’t take retirement accounts into consideration when calculating your expected family contribution, but they almost all will check on how much you have earmarked for education.

“Throwing money into retirement lowers income and takes money out of taxable accounts where schools will count it against them,” says Kraus.

Still feel guilty about directing some of your money into your retirement fund instead of the college fund? Remember, if you shortchange your own retirement and run into money or health problems in your 60s or 70s, your kids might not be established enough in their own careers to help you out financially. Or, even worse, they might have to quit school to help you pay the bills.

MONEY College

Why It’s So Tough To Find Out the True Cost of College

calculator missing keys
Larry Washburn—Getty Images/fStop Good luck finding your college's net price calculator.

Schools are supposed to help prospective students figure out the real price in advance. Actually finding the calculator is another matter.

U.S. colleges have started, however reluctantly, to share more information about what students might actually pay to attend—the so-called net price. But the calculators that Congress has forced schools to provide since 2011 are often hard to find, vary widely in quality, and should be used with some caution.

The idea behind the law was to give families a rough, individualized estimate of what college might cost them once scholarships and grants are deducted from the sticker price. (Loans are not supposed to be included in the net price figure since borrowing increases rather than decreases the cost of education.)

A realistic estimate of costs would give families much better information before a child applies. Previously they only got true cost information after the student was accepted and had been offered financial aid.

But many people, including parents and even high school counselors, are not aware the calculators exist, said college consultant Lynn O’Shaughnessy, who runs website.

Some colleges do not seem eager to enlighten them, even though the U.S. Department of Education last year urged schools to post the tools prominently in logical places.

One quarter of the 50 colleges randomly selected by the Institute for College Access and Success did not have links to their calculators on the financial aid or costs sections of their sites. Even when the calculator was on a relevant page, it was rarely posted prominently, the survey found.

Five of the 50 schools confused matters further by using some other name for the tool, such as “education cost calculator” or “tuition calculator.”

The survey was conducted in 2012, but not much has changed, TICAS president Lauren Asher said last week.

To find New York University’s calculator, for instance, users must click on three tabs—”Admissions,” “Financial Aid and Scholarships,” and finally “Financial Aid at NYU.” At University of Pennsylvania, it takes four clicks to find the net price calculator, which is highlighted in a small blue box.

Harvard College, by contrast, posts its calculator on its financial aid home page, under the headline “You Can Afford Harvard.”

Families often can find the elusive tools by entering the college’s name and “net price calculator” into a search engine.

Another place to find links to net price calculators is on each college’s information page on the College Board’s Big Future site. This provides other critical aid information, such as the percentage of financial need each college meets.

One other potentially helpful tool is average net prices by income, or what other people actually paid. It can be found at the National Center for Education Statistics.

The Wide Range of Results

The relevance and accuracy of all this information can be questionable, though.

The difference between calculator estimates and actual costs for many families will be as little as $500, but for some, the gap could be as wide as $5,000, says Mark Kantrowitz, publisher of education resource website

The TICAS report said many colleges used outdated cost information in their net price calculators. In addition, 40% included estimates of “self-help,” including work study and loans, and most made this lower “estimated remaining cost” figure more prominent than the federally required net price.

The calculators also vary dramatically in their design and the amount of information they require. The number of questions range from eight to 70, as some schools want the calculator to be as easy to use as possible, while others try for the most accurate results.

College access advocates such as TICAS worry that fewer families will complete the calculator if it is too complex or requires information that can only be gleaned from tax returns.

On the other side, consultants like O’Shaughnessy say the simplified versions’ estimates can be far off base.

“Generally, the more questions asked by a net price calculator, the more accurate the results,” Kantrowitz says. But he cautioned families against relying too heavily on the result of any calculator.

“Net price calculators provide a ballpark estimate of the real cost of the college,” Kantrowitz says. “They tell you whether the college is inside or outside the ballpark of affordability but do not distinguish between home plate and center field.”

More on college costs:


TIME Saving & Spending

The Problem With Millennials, In One Staggering Statistic

KC Photography—Getty Images/Flickr RF

It's almost unbelievably bad

New data about how much debt today’s students are graduating college with just came out. The results are ugly, but that’s not the worst of it.

The Project on Student Debt conducted by The Institute for College Access & Success says the average debt load carried by last year’s crop of four-year nonprofit college grads is $28,400. That number is several hundred dollars higher than last year and roughly ten grand more than the average a decade ago. Roughly seven in 10 students today graduate with debt, a figure that has ticked up in that time period, as well.

This number would likely be even higher if for-profit colleges, which were included in previous tallies but left out this year because many failed to provide data, were included, since their students tend to leave school burdened with debt at a higher rate — 88% indebted with at average of nearly $40,000 in 2012.

That’s bad — but that’s not the problem. You might think these young adults would be worried about paying off a new car’s worth of debt they’d accrued before getting their first full-time job.


A new study from Junior Achievement USA and PwC US conducted by Ypulse finds that 24% of millennials think their student loans will be forgiven.

“It’s a scary statistic,” Junior Achievement president Jack Kosakowski tells CNBC. The survey doesn’t explore why roughly a quarter of young people have such an optimistic — and for the majority, unrealistic — expectation.

In many cases, the payments they expect to be forgiven are significant. “Loan payments are also rising, taking a significant chunk out of Millennials’ pay checks when it comes time to pay up post-graduation,” the report accompanying the survey says. “One-third of those with student loans are shelling out over $300 per month and five percent are actually paying more than $1,000 per month.”

Although 60% of respondents to the PwC/JA survey say financial aid is a consideration in their school choice, the survey also finds that today’s high school seniors are relying on an average of just over $8,200 in contributions from their parents and more than $6,600 in student loans to help fund their first year’s tuition. Their average contribution from savings or earnings: less than $1,400. (These students also spent almost $200 of their own money, on average, on back-to-school shopping. School supplies, followed by clothes, were the most common purchases.)

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MONEY College

Why College Costs Keep Eating Up More Of Your Paycheck

Aydin Buyuktas / Alamy

Tuition is rising faster than incomes. But a new private college price war and the improved economy have meant lower prices for many students.

College became a little less affordable again for most students in 2014, as the typical school raised prices faster than financial aid—and faster than average income growth.

In its annual analysis of the state of college prices, the College Board found that most higher education charges continued to outpace the 1.5% average growth in incomes. The cost of attending the typical public university–including dorms, dining hall privileges, textbooks, and miscellaneous expenses—reached $23,410, up 2.6% from last year. Private college costs hit $46,272, up 3.4%.

Even after subtracting scholarships and grants, the average cost of a public education rose by 3.5%. The average net cost of attending a private college was up 4.1%.

A Few Bright Spots

With college costs continuing to eat up a higher percentage of most families’ incomes, “you can see why there is a lot of stress for people” says Sandy Baum, a co-author of the College Board report.

But, she added, “things are looking a little bit better” for some students. The lowest-cost option—attending a local community colleges while living at home—remained comparatively affordable. The total for tuition, fees, textbooks, and commuting to campus averaged $6,410 this year, a 3.1% increase over 2013. But since most of those students received grants or were able to take advantage of at least some of the $2,500 American Opportunity Tax Credit, the net cost of attending a community college averaged $1,320.

And the College Board noted that in real terms—in other words, after adjusting for inflation—private colleges are about 4% less expensive than they were in 2008. The reason: A decline in the number of 18-year-olds has sparked a scramble to fill seats at many small and non-prestigious private colleges, says Susan Fitzgerald, who analyzes college finances for Moody’s Investors Services.

Elite colleges are in such high demand that they can charge whatever they want. But schools without national reputations, Fitzgerald says, “are facing a very competitive environment, and one of the ways they are competing is on price.” So while such colleges typically hike published tuition prices, they are also raising the amount of financial aid they offer. As a result, the net prices charged to new freshmen have remained fairly flat.

A Pause at the Publics

In 18 states, the average cost of public college tuition rose by less than the 2% inflation rate, the College Board found. For example, after many years of dramatic tuition increases, the University of California, Berkeley charged tuition and fees of $12,972 this year. While that’s an 80% increase over 2007, it’s a rise of only 1% from last year. At the other end of the country, tuition and fees at the University of Maine averaged $10,606 this year, up only $6 from 2013, and $24 from the fall of 2011.

Many public universities have been able to moderate tuition inflation because the economic rebound has increased state tax coffers. And states have used some of those gains to at least partially alleviate the severe higher education budget cuts of the past few years, Baum says.

But, she notes, on average states are providing about 20% less funding per student to public colleges than they were prior to 2007.

A recovery in state budgets has put tuition inflation on pause in many states, she says. Unfortunately, there’s no guarantee that tuition hyperinflation won’t return. “We will again at some point experience tighter state budgets,” Baum warns.

In fact, in an ominous sign, some college leaders are already pushing for tuition hikes in 2015. Janet Napolitano, president of the University of California system, last week requested permission to raise tuition by 5% a year for the next five years.

Public universities: Sticker price Public universities: est. average net cost (after grants and tax aid) Private colleges: Sticker price Private colleges: est. average net cost (after grants and tax aid)
2013-14 $22,826 $16,717 $44,750 $33,710
2014-15 $23,410 $17,300 $46,272 $35,082
1-year $ increase $584 $584 $1,522 $1,372
1-year % increase 2.6% 3.5% 3.4% 4.1%

Source: The College Board

More on saving for college from Money 101:

MONEY College

How to Give the Gift of College This Holiday Season

stacks of money wrapped with a gold bow
Deborah Albers—Getty Images

The kids in your family could probably use cash towards school more than a new toy (or at least parents might prefer that). Here's how to make it happen.

Saving for college can be tough, but many families do not tap a potentially generous resource: relatives and friends.

Various companies are trying to change that by making it easier for parents to ask for, and receive, contributions to college savings plans. As the holidays approach, these providers are stepping up their efforts to publicize these options and convince families to try them.

“I think people can feel comfortable going out and saying they prefer gifts that are more meaningful,” says Erin Condon, vice president of Upromise, a college savings and cash rewards program, run by Sallie Mae.

“They can say, ‘Instead of giving our son a truck, how about helping us save for college? Or giving him a smaller truck and putting $20 into his college savings plan?'”

Named after Section 529 of the Internal Revenue Code, 529 college savings plans allow contributors to invest money that can grow tax-free to pay for qualified higher education costs.

Although typically sponsored by states, the plans are run by investment companies and account balances can be spent at any accredited college or vocational school nationwide.

Upromise released a survey last week that found seven out of 10 parents would prefer their children received money for college rather than physical gifts. Upromise offers a way to let others do just that: it is called Ugift, a free online service that families can use to solicit their social networks for college contributions.

Friends and family are emailed bar-coded coupons they can print out and send in with a paper check. The service is available to customers of the 29 Upromise-affiliated 529 plans, which include two of the country’s largest: New York’s 529 College Savings Program and Vanguard 529 College Savings Plan in Nevada.

Upromise has found that customers who enlist others to help them save via the site’s rewards program and shopping portal typically accumulate three times as much as customers who do not, Condon says.

The 529 plans run by Fidelity Investments also offer a free service that allows parents to set up a personalized contribution page and share links via email or social media that allow direct contributions to a child’s college savings account via electronic check.

Fidelity released its own poll recently, which found 9 out of 10 grandparents surveyed said they would be likely—if asked—to contribute to a college savings fund in lieu of other gifts for a holiday, birthday or special occasion. Fidelity manages 529 plans for Arizona, Delaware, Massachusetts, and New Hampshire.

These programs tap into the crowd-funding zeitgeist that has seen people appealing to their social networks to help pay for creative projects, charitable causes as well as personal costs such as medical expenses, travel and weddings.

As college costs rise, more people see the need for such help, according to Joe Hurley, founder of the 529 information site

“It’s a reaction to material gifts, and also the rising cost of college that’s creating so much anxiety for parents,” says Hurley.

Create a College Registry

A few sites facilitate contributions to any 529 plan. GradSave, for example, lets parents set up a free college savings registry that accepts contributions from friends and family. The money is held in an FDIC-insured account until the parents transfer it to their 529 accounts.

Leaf College Savings, meanwhile, offers an education gift card that anyone can use to make a 529 contribution for someone else. The giver loads an amount between $25 and $1,000 onto the card and gives it to the parent, who can then redeem it at the Leaf site and transfer the funds to his or her 529 plan. If the parents do not have a plan, the site helps them set one up.

The gift card, however, comes with an “activation fee” of at least $2.95 plus another $2.95 to get a physical card rather than one sent by email or Facebook or printed out on your computer.

But givers do not need an intermediary to contribute to a college savings plan, says Hurley, since virtually every 529 plan accepts third-party gifts. Those who want to contribute directly to a child’s account typically will need to include the account number and perhaps the child’s Social Security number, but Hurley notes there is a way to bypass that requirement.

“Just make the check out to the 529 plan, hand it to the parents and say, ‘Here, put it into the plan,'” he says. “That’s pretty easy.”

One thing that may not be easy is figuring out who gets the tax break for the gift. Most states offer tax deductions for 529 contributions when the contributor is a parent. Some offer the break to any contributor. And some do not offer any tax break at all.

The solution? Talk to your tax professional.

Related: More on college savings plans

MONEY College

12 Things We Wish We’d Known When We Were 18

Girl moving off to college
Eric Raptosh Photography—Corbis

Suze Orman and other experts share their financial advice for the Class of 2018. Follow these tips to keep your college experience from becoming a major money mistake.

Prepping for freshman year at college typically includes activities like shopping for dorm essentials, reviewing orientation packets, and Googling your new roommate.

Most students don’t spend a lot of time thinking about how they’ll manage their money in this new phase of their lives.

And yet, what you do in those first few years of parental emancipation can affect you for years—or decades—to come. Students graduated last year with an average $35,200 in college-related debt, including federal, state and private loans, as well as debt owed to family and accumulated via credit cards, according to a Fidelity study. Half of those students said they were surprised by just how much debt they’d accumulated.

To make sure the class of 2018 gets off on the right foot, MONEY gathered sage advice from top financial experts about the lessons they wish they, their kids, or their friends had known before starting school.

1. Limit your loans. “Do not take out more in student loans than what you are projected to earn in your first year after college. If you only expect to make $40,000, you better not take out more than $40,000. The chances of you being able to pay it back is close to nil. If you need to take a private loan, you’re going to a college you can’t afford. Remember, going to an expensive school doesn’t guarantee success. The school never makes you, you make the school.” —Suze Orman, host of The Suze Orman Show and author of The Money Book for the Young, Fabulous & Broke

2. Finish in four. “Many kids are finishing school in five or six years. But every extra year is potentially an extra $30,000 to 40,000 in expenses. Map out your coursework and figure out exactly what you’ll need to do each semester. Be vigilant about sticking to your plan. Try to catch up on any credits by taking classes at a community college over the summer.” —Farnoosh Torabi, author of You’re So Money

3. Study money 101. “Sign up for an economics or personal finance course. This way, when you graduate, you’ll be better equipped to manage money for the rest of your life.” —Brittney Castro, CEO of Financially Wise Women

4. Leave the car at home. “Everyone feels like they need a car, but with the combination of sharing services like Uber, Lyft, Zipcar and public transport, that isn’t always the case. If you’re living in a major metropolitan center or on campus, consider leaving your car behind. It’s much cheaper to use one of these car services than it is to pay for insurance, gas, parking, car maintenance and car payments.” —Daniel Solin, author of The Smartest Money Book You’ll Ever Read

5. Lead rather than follow. “Especially in college, you’re going to be surrounded by people doing dumb things financially. You’ll see people financing their lifestyle with student loans or their parents’ money. Don’t feel bad if you can’t afford the same things as others. I knew a student who was financing his whole college experience with debt and he was always asking people to go shopping with him. If I’d tried to keep pace, I’d have ended up in the same debt-ridden place as him.”—Zac Bissonnette, author of Debt-Free U

6. Find free fun. “You can still do fun things at school, without spending a lot of money. You’re paying an activity fee in your tuition, so you ought to make sure you’re taking full advantage of whatever the school offers for free—be it concerts, trips, lectures. The school I went to provided grants to help students travel abroad and offered free plays and trips through different clubs.” —Farnoosh Torabi

7. Be purposeful with plastic. “The idea that you need to build credit in college is wildly overrated. It’s not a bad idea to build credit, but having built up a bad credit history will hurt you more than having no credit history. You don’t need to feel pressure to get a credit card. You can get by just fine with cash and a debit card; no one is expecting you to have a ton of borrowing history when you’re getting your first apartment anyway.” —Zac Bissonnette

8. Put your budget on autopilot. “Keep track of the money you’re getting in from loans and your parents, as well as your expenses. Use an app like, which lets you link your debit and credit cards to your online account to track your spending and easily help you keep on budget.” —Daniel Solin

9. Enlist Mom and Dad. “Check in with your parents once a month and review your spending with them. Talking about this will help you to avoid what I call ‘budget creep,’ where all of a sudden you’re spending $30 a day on food and entertainment. All those little extras add up and you could be spending over a hundred a week… on what?”—Neale Godfrey, chairwoman of Children’s Financial Inc.

10. Protect your stuff. “College students may not think they have a lot of valuable possessions. But think about the value of electronic devices alone, not to mention textbooks, clothes, even that ratty futon. The good news is that renters insurance is typically inexpensive and can protect you from fires, theft and other incidents. The even better news is that students’ stuff may be covered by their parents’ homeowners insurance. Check the policy prior to hitting the books.”—Kara McGuire, author of The Teen Money Manual

11. Establish rules with roomies. “If you’re renting an apartment with friends, be sure everyone and their parents sign the lease. Try to have everyone’s name on the utilities bills as well. Kids will take advantage of other kids, and you don’t want to be the one who is stuck being responsible for everything. If you can’t attach everyone’s names to all the bills, have them prepay. Also, make sure everyone chips in for general expenses like cleaning supplies and toilet paper, so you don’t end up paying for all of that as well.” —Neale Godfrey

12. Share with discretion. “Social networks are a public record. Your future employers will look you up on your social sites and judge you based on what they see. So something that you thought was cute in college could keep you from getting the job. Know that every move you make on those sites could have a direct consequence on your ability to land a job.” —Suze Orman


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