The Freshman Fund for college savings

October 14, 2008 2:51:07 PM PDT
With the tough economy, many parents are now being forced to re-think how they are going to pay for their child's college education.In our continuing On the Money series, we show you how parents can have friends and family help out, all with the click of a mouse.

The Wilson twins are not yet a year old, but Liam and Seamus each have college savings funds, with so-called 529 plans.

"It was something that we had talked about before the boys were born, that we really wanted to start saving early for college within that first year," dad Tom Wilson said.

Tom and Kerri Wilson have relatives and friends happy to contribute. But they have taken things a step further by signing up with the Web site called the Freshman Fund.

"What we do is we allow anyone to buy a gift certificate and send it to someone to be redeemed into any 529 plan," Freshman Fund CEO Jason Olim said.

And the Freshman Fund allows families to link their own pages with photos of the children.

In many families, people are big on giving toys or clothes or even books, but real numbers show that a donation to a family's own college fund is literally the gift that keeps on giving.

"Every day, people are giving money for birthdays, for christenings, for baptisms and just because," Olim said.

There are a number of 529 plans to choose from. They are based on portfolios of stocks and bonds. Some of them, however, carry a lot of risk. Investment advisor Richard Bregman says he has clients with young children who have lost money in their stock-heavy 529s during the current financial crisis. But he points out such families have plenty of time for the markets to recover, and that there are less risky 529 options.

"It's suitable at any age, and that's really what it's designed for," Bregman said. "No matter when you're starting, put it in there. They'll have an age-based option that's appropriate for your child's age."

"This seems to be a bit of security, a bit more security for us," Kerri Wilson said.

For more information, visit FreshmanFund.com.

Also, to read more about the law that allows third-party contributions in New York State (and mentions tax deduction information), visit CLICK HERE.

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STORY BY: Education reporter Art McFarland

WEB PRODUCED BY: Bill King

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