1. SAVE FOR COLLEGE MASSACHUSETTS EDUCATIONAL FINANCING AUTHORITY
Introduce yourself and share your financial aid background
Let families know you’ll be speaking on college financial aid
Explain to families the benefit of attending this seminar (learning the necessary facts of the financial aid process and free resources to help them throughout the process)
Provide the timeframe: presentation will be approximately 1 hour followed by a Q&A
Let families know if you’ll be taking questions throughout or just at the end
Let families know that this is a presentation timely for seniors in high school and their families, but juniors and sophomores can benefit from learning what’s ahead
Remind families to complete the evaluation following the presentation
Tell families that the slides to this presentation can be found online on mefa.org/Events
Point out the handout that families should have received when they arrived, which is filled with helpful information on financial aid
MASSACHUSETTS EDUCATIONAL FINANCING AUTHORITY

2. Benefits of saving and 529s
Agenda
Benefits of saving and 529s
The new development of College Savings Accounts or Child Development Accounts
New State initiatives – SeedMA and SoarMA
New tools – Invite Ed, Tax deduction
Effect on enrollment and enrollment management
Discussion

3. Why are savings important?
The Benefits of Savings, Particularly 529 Plans

4. Saving vs. Borrowing
*Based on 10 years at an interest rate of 7%. This example is an estimate only and market conditions may change.

5. What is a 529 College Savings Account?
A 529 College Savings Account is a tax advantaged account specifically designed to help families save for college through professionally managed portfolios of mutual funds
The funds in the account can be used to pay for qualified higher education expenses (including accredited vocational and technical training), and are exempt from federal and state income taxes
Can be used at most accredited colleges and universities (and career schools eligible for Title IV funding) nationwide and at eligible foreign institutions
The U.Fund Account is the Massachusetts 529 Plan offered by MEFA and managed by Fidelity Investments

6. Save for qualified higher education expenses
529 Account Features
Save for qualified higher education expenses
Tuition, fees, room, board, books, supplies, and equipment
Savings can be used at any accredited college or university nation wide
Parent or adult account owner maintains control over account on behalf of the student
Minimal impact on financial aid eligibility
Qualified withdrawals are free from federal income tax

7. Favorable treatment for financial aid Studies show less loan debt
Positive Impact of 529s
Favorable treatment for financial aid
Studies show less loan debt
Increased attendance and graduation
Benefits all income levels
*Image source: Washington University at St. Louis George Warren Brown School of Social Work Research Brief,
March 2013 Elliot, William, Hyun a-Song, Ilsung Nam

8. Pioneering CSA research

9. Child Development Accounts
CSA programs have spouted nationwide
Oklahoma
Seed OK
San Francisco
Kindergarten2College
St. Louis
College Kids
Rhode Island
College Bound Baby
Maine
Alfond Scholarship
* Image from Prosperity Now

10. Is money seeded in to the account?
Various Features
Is money seeded in to the account?
How is the program funded: publicly, privately, or both?
At birth? Or in kindergarten?
Are there match incentives?
Is the money specifically designated to a 529 account?
Financial education included?
Do families need a bank account to contribute?

11. Some Early Indications
Overview of Effects of CSAs on Education, Health, Equity, and Economic Mobility
* Quick Guide to CSA Research, IASP Brandeis and Prosperity Now, 2018, Markoff, Loya and Santos

12. What’s going on in Massachusetts?
New Improvements

13. Launched in 2015 through Mayor Walsh’s Office of Financial Empowerment
Boston Saves
Launched in 2015 through Mayor Walsh’s Office of Financial Empowerment
Piloted at several Boston Public School Kindergartens
The program will begin to grow to all district and charter schools in fall 2019
$50 to every eligible kindergartener
Match up to $25 every 3 months
Parents can choose savings vehicle, eg. 529 vs. other
Classroom activities

14. Seeds $50 into a U.FUND 529 account
SOAR MA Pilot Program
Pilot program initiated in 2016 through Office of Economic Empowerment partnered with MEFA and Inversant
Seeds $50 into a U.FUND 529 account
Matches each $100 milestone with an equal $100 match up to $400
Open to 7th graders in five public schools in MA
Lowell, Stoklosa Middle School
Haverhill, Consentino Middle School
Pittsfield, Reid Middle School
Worcester, East Middle School
Springfield, South End Middle School

15. Money can be used to pay for:
SeedMA Pilot Program
Provides kindergarten students in the Worcester Public School System with $50 deposit to establish a MA 529 college savings account
Office of Economic Empowerment is partnering with MEFA and Inversant to deliver the SeedMA program and age-appropriate financial education training to Worcester families
Money can be used to pay for:
College tuition, fees, room and board, books, supplies, and computer equipment
* Image from PBS

16. Statewide Launch
Beginning in Fall 2020, every baby born in MA will have the opportunity to receive SeedMA money
* Image from mass.gov

17. What’s new for MEFA

18. MEFA’s College Planning Tool
Create a personal strategy to pay for your child’s higher education costs:
Record your current college savings
Project your future college expenses
Receive guidance on meeting your shortfall

19. Saving for College Tax Benefits
Contributions to the U.Plan and U.Fund are tax deductible
Tax deduction will continue through 2021
Up to $2,000 in payments for married filers
Up to $1,000 in payments for individual filers
Limits are per filer, not per account

20. Combined Account Maximum: $400,000 No Annual Account Maintenance Fee
MEFA U.Fund 529 Plan
Minimum Initial Investment: $50 lump sum or $15/monthly automatic investments
Combined Account Maximum: $400,000
No Annual Account Maintenance Fee
Multiple investment options
Active management, indexed portfolio, individual allocation portfolios, FDIC

21. The U.Plan Prepaid Tuition Program
How the U.Plan works:
Allows you to prepay up to 100% of tuition & mandatory fees at a large network of MA public and private colleges & universities
By purchasing Tuition Certificates now, you lock in today’s tuition and mandatory fee rates
U.Plan Tuition Certificates:
Represent interest in Commonwealth General Obligation Bonds
Are backed by the full faith and credit of the Commonwealth of MA
Are not subject to market fluctuation
Require $300 minimum to get started
Annual enrollment period: May 1st to June 30th
To learn more about the U.Plan visit mefa.org/uplan

22. Participating U.Plan Colleges & Universities

23. Presenter: Jonathan Hughes jhughes@mefa.org
Discussion
Presenter: Jonathan Hughes