6 Clever Gifts to Pay for College

Forget Toys. Why Not Give a Gift That Lasts?

As the cost of college rises, many parents find themselves overwhelmed at the prospect of paying for their children’s education. By 2030, the cost of a four-year degree is expected to top $205,000, according to the U.S. Department of Education.

Considering these rising costs, it’s no surprise that 84 percent of parents say that they would welcome contributions towards college instead of traditional presents.

Luckily, friends and family can help by giving the gift of a college education. Now, every birthday party, baby shower, or gift-giving holiday can be an opportunity to add to the college fund. Below, we explore some of the ways families can make saving for college a collaborative effort, from the new and innovative to the tried and true.

We will focus especially on one of the best college savings tools out there, a 529 College Savings Plan. A 529 plan is a type of tax-advantaged investment account specifically designed for education savingsand it also allows gifts from friends and family. A 529 offers flexibility, tax benefits, and growth potential while managing risk.

Plus, there are many cutting edge ways to give into a 529 plan, making giving easier than ever. Regardless of whether your gift recipient has already started saving in a 529 plan or not, there are several ways to make a contribution. 

Of course, we will cover the “old fashioned” methods too, such as cash and savings bonds. However, there are drawbacks to using these, particularly less potential for growth. But we will lay out all the options, and leave the choosing to you! 


CollegeBacker makes it easy to send the gift of college to anyone, directly into a 529 plan. Plus, it provides online tools to open a 529 plan, manage the account, and determine a personalized savings goal.

Giving with CollegeBacker is as simple as entering the recipient's email address and paying with a debit card, credit card, or bank transfer. Or, you can visit the child’s unique link, such as CollegeBacker.com/Luke. Contributions are deposited directly into the 529 plan.

Gift givers can also set up ongoing monthly contributions, a good option for grandparents who want to contribute regularly, or one-time gifts can be made for special occasions like baby showers, birthdays, and holidays.

There are no mandatory account fees aside from debit and credit card processing fees, though you can pay an optional “tip.” Plus, 10 percent goes towards helping low-income student save for college.


Child unwrapping a gift
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Ugift is a free-to-use service that 529 account owners can use to receive contributions from friends and family. With Ugift, gift givers don’t need to know the 529 plan account number, and contributions can be made online, so there’s no need to deal with checks.

However, in order to contribute through Ugift, the recipient must already have a 529 plan, and the owner must register with Ugift and invite others to participate using a special Ugift code. It’s not possible to contribute if the plan owner hasn’t provided you with a code.

Ugift’s service is geared towards special events like birthdays and graduation as opposed to regular ongoing contributions, however, once you’ve been given a code, you can use it to make contributions at any time.

Contributions can be made via electronic bank transfers or checks, but no credit or debit cards.

Gift of College

Happy Birthday tag
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Gift of College provides gift cards that can be redeemed through the company’s website to fund any 529 account. Gift cards can be purchased online or at Toys R Us and Babies R Us retail stores.

The recipient will need to register for an online profile and link an existing 529 plan account or open one, in order to redeem the card. Denominations range from $25 to $200, with a small fee of $2.95-$5.95.

With physical and online options, these are a nice option for gift givers who want to give a tangible gift on special occasions, and there’s no need to know account numbers or wait for an invitation to contribute. 

Industry Standard 529 Plans

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Although it’s not as streamlined as using tools like the ones above, standard 529 plans do make it possible to accept contributions from third-parties, or even open an account for someone else.

In fact, anyone can open a 529 for anyone, even if the beneficiary is not your child. Likewise, anyone can contribute to any 529 plan. If you don’t want to open and maintain your own 529 plan, or if the recipient already has an existing plan, you can contribute to that instead.

The standard way of contributing to an existing 529 plan is to mail in a check and indicate the plan account number. Typically you’ll also need to print and include the plan’s Additional Contribution Form with your check. 

Savings Bond

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 While you can’t buy the old fashioned paper savings bonds any longer, U.S. Savings bonds are still around and can be purchased online. Savings bonds are backed by the United States government, which makes them one of the safest possible investments.

The drawback is that they typically earn very little interest (just 0.10 percent currently), although Series EE savings bonds are guaranteed to double in value after 20 years, for an effective interest rate of 3.5 percent.  

Plus, while interest earnings are normally subject to Federal income tax, earnings on EE bonds can be excluded from income tax when they are used for qualified education expenses.


Money as a gift
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Giving cash or a check is perhaps the simplest way to give money for college, and who doesn’t like finding money inside that greeting card?

The drawback is that if the money is likely to be deposited in a standard savings account, it’s unlikely to grow much. Currently, the average interest rate on savings accounts is just 0.06 percent APY.

It’s also possible that, while well-intentioned, the money won’t be used for college and will instead be spent on something else. Other methods, like contributing to a savings plan designated for education expenses, can help ensure the money goes towards college.

Closing Thoughts

While savings bonds and cash gifts aren’t going anywhere, if you want to give the gift of college, a 529 plan offers the most flexibility and potential for growth. And thanks to new services it’s now easier than ever for anyone to contribute. But no matter which method you choose, you’ll be giving a meaningful, lifelong gift, and helping to set a child up for success.