I have three children eventually heading to college. My oldest, A-, just turned 17 and picking colleges and college life are constant topics of discussion, so managing the cost of college is always on my mind too, as you’d expect. Years ago I set up three 529 accounts and set up auto-deductions so that they’d grow regardless of how the stock market did. They’re not huge, but each should cover at least the first year of college for each child. But the biggest limitation with these nice 592 accounts is that it’s a real pain for other people to contribute, so if my dad or sister wanted to give them some money towards college, it’d be cash in an envelope. Yeah, and you can imagine how long that’d last before it went to a shopping adventure.

Enter GradSave. Their vision is to make it really easy for family and others to be able to easily donate to 529 accounts.

Better than me explain it, though, let’s chat with CEO Marcos Cordero about the company…

Q: Tell me about GradSave. Where did the idea come from?

I’m a big believer in college and higher education, so for my goddaughter’s baptism I could think of no more meaningful gift than a contribution to her college savings fund. Unfortunately, I found that there was no easy way for me to make a gift directly to her college savings plan. That’s when the idea for GradSave was born.

GradSave is a free online platform that makes it easy for relatives and friends to contribute directly to a child’s college savings. It’s a great way for loved ones to give a lasting gift that will have a real impact on a child for years to come. And, with tuition costs continuing to go up, it provides parents a way to grow their child’s college savings plans more quickly, providing their kids with more options and a lower debt burden in the future. Let’s face it, most parents think their kids have plenty of toys, but almost everyone can use a little help with college savings.

GradSave has been growing steadily since we started in 2012; in fact, we now have over 11,000 families saving with us!

Average College Tuition (source: St. Louis University)

Q: If I already have an existing 529 for each of my children, how do I use GradSave to make it easy for others to contribute?

It’s simple and quick:

· Register on GradSave and create a profile for your children (one for each child).

· Personalize your child’s profiles with a picture and a message for supporters who visit the page. (Profiles with a picture are 7 times more likely to receive a gift, so we strongly recommend adding one.)

· Start inviting family and friends to make a gift at birthdays, holidays or other special occasions. Gift-givers can make one-time or recurring gifts. The average recurring monthly gift on GradSave is $65, and 60% are given in perpetuity, so they’ll keep going until the gifter cancels.

· Link each child’s profile to a 529 account, and transfer gifts from GradSave to the accounts.

GradSave charges no fees for making or receiving gifts, or for transferring funds.

By the way, GradSavers don’t need a 529 account to get started. In fact, we had one family that created an account for their child before it was born, and received $1,700 in gifts by the time the baby arrived.

Q: Can teens contribute to their own 529 accounts, and does that make sense?

Regardless of whose name the 529 is in, anyone can contribute to it through GradSave, including teens contributing to their own accounts. Whether or not it makes sense financially depends on your own situation and needs. But from a life lesson perspective, I certainly advocate getting kids in on the act of saving for their own college expenses.

Q: If my father contributed $500 to my son’s 529 account through GradSave, what percentage do you take as a transaction fee?

If the contribution is made with electronic check (ACH bank draft) = 0%

If the contribution was made with credit card = just under 3% of gift is used for credit card transaction, 0% goes to GradSave.

Q: Explain how friends would contribute to a 529 account today, and how it’d work through GradSave.

Not all 529 plans accept third-party contributions, and if they do, it can be complicated. To make contributions to an account owned by someone else you will need to know the account number and indicate that number on your check. For most 529 plans you should also use the contribution form that is either pre-printed then sent to the account owner or perhaps can be downloaded from the 529 plan’s web site. It would be a good idea to call the plan’s toll-free number and make sure you are following the appropriate procedures in making your contribution.

A small number of 529 plans may not accept third-party contributions. In that case, you’d have to give the parents your gift with the request that they place it into the 529 accounts.

With GradSave, friends visit the child’s GradSave profile page, then click “Send a Gift.” Gifters can contribute as little as $15. Friends can also purchase a Gift Card (in amounts ranging from $25 to $500), which the parent can apply to their account on GradSave.

Q: What’s next for GradSave?

With GradSave, parents can easily save thousands of dollars more than they could on their own, giving their kids more options for the future. We just want to keep growing and spreading the word to as many families as possible.

Pretty interesting, eh? If you have a 529 or other college fund set up, check them out. It’s a great free service: GradSave.com

Disclaimer: There’s no disclaimer. I just bumped into these guys and think this is a smart idea and any thing to help us and our kids survive the financial burden of college is a win in my book.

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