Amplify Saving with a Little Help from Your Friends (& Family)
Have you ever been to a friend's garage sale, spotted a barely used toy, and thought to yourself, "Didn't I give that as a gift?" If you have, you're not alone. That trendy toy that seemed so cool last birthday or Christmas will probably collect dust and end up at a garage sale or in a donation pile.
But what if there’s a gift that has the possibility to get better with time? Investing in education is a great example.
We understand, saving for your kid's future education can feel like trying to swim a 100-meter race in a pool filled with pudding. With daily expenses increasing and unexpected costs like braces showing up at every turn, it's no wonder many people think they'll never be able to save enough for college or other future education options. Relax – you don't have to do it alone. With The Education Plan®, a 529 education savings plan, you can harness the collective power of your inner circle of friends and family members into a savings machine for your kids' education.
Meet Ugift: A Straightforward Gifting Program
Ugift is an easy-to-use feature of a 529 account with The Education Plan. It makes it convenient for your squad to contribute to your child's education savings. When you share a unique code with family and friends, they can transfer funds into your child's account. Here are just three reasons why it's worth considering.
- Small Gift Today, Potential Big Impact Later: Even $25 can help slash future student debt.
- No More Gift Drama: Aunts, uncles, grandparents, and friends can stop stressing about what to get for birthdays or the holidays.
- It Keeps on Giving: Unlike that toy that'll be forgotten faster than last week's TikTok trend, this gift has the potential to grow over time.
It Takes a Village
It’s simple. If five friends or family members each give $50 a year from birth to age 18, that's $4,500 in initial investment. Add some compound interest earnings, and BAM! – you could have a nice chunk of change for future education. It might not cover everything, but it beats starting from zero. Remember, while investments can earn and grow over time, they are also subject to risk and loss of initial investment.
Making It Easy: Gift Request Inserts
Here's a way to make it easy for your friends and family. Download our gift request insert and add your Ugift code into party invites or baby shower cards. It's a subtle way of saying, "Hey, instead of another rattle, how about helping secure my kid's future?" You can use them for any celebration, including:
- Birthday parties
- Baby showers
- Graduations
Playing the Long Game
Your five-year-old may not jump for joy over an education fund contribution today. But fast forward 12 or so years to graduation day when they're old enough to know how much college will cost, and they'll be thrilled that you were thoughtful enough to think ahead. For the years in between, it's a great way to teach them about saving and the value of making plans for the future.
Raising Savvy Savers
As your child gets older, discuss the benefits of their 529 account with them and encourage them to consider the value of contributing some of their own money. As active participants in saving for their future education, they'll have an opportunity to pick up some solid financial lessons like:
How compound interest can help your money grow over time
Why thinking ahead can pay off
The power of group contributing
More Than Just Money
This is important. You're not just saving them time and effort when you encourage your friends and family to embrace education gifting over toy gifting. You're showing your child that a whole bunch of people believe in their future. The Education Plan and Ugift are like friendly life lessons that teamwork makes the dream work—especially when it comes to your kids' future.
So, next time you're planning a party for your little one, why not ask your friends on your guest list to try the "gift of education", a gift your child will thank you for years down the line.
Ready to get started? Log in to your account with The Education Plan to generate your unique Ugift code. If you don’t have an account yet, you can open one in about 15 minutes and start sending your gift code today!
Frequently Asked Questions
A 529 plan is a tax-advantaged investment account that is designed to grow savings for future education expenses for a specified beneficiary. 529 plans offer unique benefits and features that make them an appealing strategy for education related saving.
A 529 plan can be used for “qualified educational expenses.” For federal tax purposes, qualified educational expenses include:
- Tuition and fees at accredited higher education institutions
- Books
- Supplies and equipment
- Room and board for beneficiaries attending on at least a half-time basis.
- Computer technology, equipment, and internet access
- Up to $10,000 a year for K-12 tuition and expenses (Limit increase to $20,000 in 2026)
- Expenses for educational special needs services
- Transfers to an ABLE account for the beneficiary (transfer subject to annual limit)
- Apprenticeship expenses
- Up to $10,000 for student loan repayment
- Credentialing expenses and certification programs
- Roth IRA rollover for the beneficiary
If you're not sure if an expense is considered "qualified," we recommend consulting with a tax professional or advisor. Unqualified expenses will be treated like ordinary income: state and federal taxes will apply, with a 10% federal penalty for withdrawals from your 529 plan used to pay for them.
New Mexico residents can deduct contributions to The Education Plan from their state taxable income each year. This includes contributions made to an account that you are not the account owner of.
You cannot deduct contributions from federal income taxes.
Any person at least 18 years old with a valid Social Security Number (SSN) or Tax Identification Number (TIN) can open a 529 account. The account holder chooses the investment options, designates a beneficiary, and requests the distribution of funds.
The cost of college continues to rise, including tuition, housing, food and supplies, so it’s important to begin saving as soon as possible. You can learn more about how much a typical college education costs on our Cost of College page. It’s never too early or too late to start.
The Education Plan offers a variety of investment options to fit you and your family’s needs, risk tolerance and goals. You can see all of the available investment portfolios on the investments page.
Yes, you can use up to $20,000* a year to cover tuition and expenses for K-12 education.
Qualified K-12 expenses include:
- Tuition (public, private, and religious)
- Curriculum materials, books (including digital/online) and instructional materials
- Tutoring and instructional classes**
- Fees for a nationally standardized norm-referenced achievement test, an advanced placement examination, or any examinations related to college or university admission
- Dual enrollment program fees
Educational therapies for students with disabilities provided by a licensed or accredited practitioner or provider, including occupational, behavioral, physical, and speech-language therapies
*Starting in tax year 2026. The annual limit is $10,000 in tax year 2025 and permitted for tuition only.
**Tuition for tutoring or educational classes outside of the home, including at a tutoring facility, but only if the tutor or instructor is not related to the student and—
(i) is licensed as a teacher in any State,
(ii) has taught at an eligible educational institution,
or (iii) is a subject matter expert in the relevant subject.
You can open an account with The Education Plan online or by mailing in the enrollment form. In order to open an account, you will need the following information:
- Your social security number or TIN
- Your address
- Your bank account information (in order to fund the account)
- The beneficiary’s social security number or TIN
- The beneficiary’s birthday
-The beneficiary’s address
