College Savings Options

Where to Begin

Many factors contribute to how much it could cost to attend college, including a schools billable tuition, etc., financial aid available, and the student’s financial situation. There are three basic steps to get started learning how much college could cost you:

Learn about the Financial Aid Process.
Calculate your Student Aid Index (SAI).
Understand the numerous college savings options including 529 College Savings Plans, 529 Prepaid Plans, Independent 529 Plans, Coverdell Education Savings Accounts, Savings Bonds, and Roth IRAs.

Learn more about all of these options below.

What is the Impact of Saving on Financial Aid Eligibility?

Saving for your or your child’s education is one of the smartest things you can do as a family.

Every dollar you are able to save now is money that you will not have to borrow in the future. Many parents’ assets are protected (or not included) in the needs analysis formula used to determine financial aid eligibility. For example, the equity of your primary residence and the value of most retirement accounts are not included when calculating your assets for financial aid eligibility. Whether in money market accounts, stocks, bonds, mutual funds or a 529 plan, this asset protection allows you to choose the best method of savings for your family. There is no asset protection allowance for money saved in a child’s name, but saving for their education is still a smart idea. Whichever method you choose, saving for your child’s education is a positive step towards making your child’s educational goals a reality.

To learn more and estimate your financial aid eligibility, visit the Federal Student Aid website.

Do I Need a Financial Planner?

Though a financial planner is not necessary to establish a savings plan, an experienced financial planner may be able to assist you in creating a plan that incorporates all of your financial goals in relationship to your resources, risk and lifestyle.

Seek a certified financial planner with special interest in Section 529 plans

Make sure the financial planner you choose has achieved certain designations in financial planning. Ask the planner what qualifies them to offer financial planning advice and whether they are recognized as a Certified Financial Planner™ professional or CFP^® practitioner, a Certified Public Accountant/ Personal Financial Specialist (CPA/PFS), or a Chartered Financial Consultant (ChFC).

If the planner holds a financial planning designation or certification, check on their background with the CFP Board or other relevant professional organizations. You can call the Board at 800.487.1497 to obtain additional disciplinary information about the professional.

You should also ask whether anyone besides you will benefit from the planner’s recommendations.

Some business relationships or partnerships that a planner has could affect their professional judgment while working with you, inhibiting the planner from acting in your best interest. Ask them to disclose any such relationships.

For more tips and strategies for selecting a financial planner, visit the SEC.gov page on Checking Your Financial Advisor:

529 Savings Plans

A 529 college savings plan is a type of qualified tuition program that was established under Section 529 of the Internal Revenue Code. A college savings plan enables you to save money for a child’s undergraduate or graduate level education in an individual investment account. College savings plans are established by states and are typically managed by an experienced financial institution. Anyone can participate in a 529 plan. Contributions into the 529 college savings plan grow federal and state income tax free. All withdrawals used for qualified higher education expenses (tuition, fees, books, supplies, room and board) are exempt from federal and state income tax.

Types of 529 Plans

The UNIQUE College Investing Plan

The UNIQUE College Investing Plan is New Hampshire's tax-advantaged 529 college savings plan open to all U.S. residents – parents, grandparents, and family and friends can save with the UNIQUE Plan.

Benefits of the UNIQUE Plan include:

Earnings – Any earnings grow federal income tax deferred.
Withdrawals – Qualified withdrawals for education expenses are federal income tax free and exempt from New Hampshire interest and dividends tax.
Minimum Initial Investment – None.
High Contribution Limit – $553,098 per beneficiary.
Investment Options:
- Age-based – Managed for you; asset allocation automatically becomes more conservative over time.
- Custom – You decide how investments are distributed across different portfolios. Learn more about your investment options.
Investment Exchanges – Contributions and earnings may be reallocated twice each calendar year.
Account fees – There are no annual account maintenance fees and no income restrictions.
Investment expenses – Fees vary, depending on your investment strategy.

For more information about the UNIQUE Plan and how to open an account please visit the UNIQUE College Investing Plan at www.fidelity.com/UNIQUE or visit the Frequently Asked Questions page – 529 College Savings Program Questions.

For Plan Performance information please view the most recent UNIQUE College Investing Plan Annual Report.

The Fidelity Advisor 529 Plan

The Fidelity Advisor 529 Plan, also known as New Hampshire's Advisor-sold 529 Plan, is available only through non-Fidelity financial advisors.

This plan offers a range of investments utilizing Fidelity Advisor Funds and the Fidelity Government Cash Reserves.

Benefits of the Fidelity Advisor 529 Plan include:

Earnings – Any earnings grow federal income tax deferred.
Withdrawals – Qualified withdrawals for education expenses are federal income tax free and exempt from New Hampshire interest and dividends tax.
Minimum Initial Contributions – None.
High Contribution Limit – $553,098 per beneficiary.
Investment Options – The Fidelity Advisory 529 Plan's Portfolios include:
- Aged-Based Portfolios
- Static Allocation Portfolios
- Individual Fund Portfolios, and
- Money Market Portfolio
Investment Exchanges – Contributions and earnings may be reallocated twice each calendar year.
Account fees – Account fee of $20 is waived if the participant signs up for a systematic investment plan or if the account balance is equal or greater than $25,000.
Investment expenses – Fees vary, depending on your investment strategy.

Please contact Fidelity Investments or your financial advisor for more information about this Plan.
For information about the Plan Performance please view the most recent Fidelity Advisor 529 Annual Report.

Options Beyond 529 Plans

Other Savings Options

Affinity Programs

An Affinity program creates brand loyalty by offering a rebate to consumers in exchange for buying certain products or shopping at certain retailers. These programs provide college savings incentives including contributions to a 529 college savings plan. Parents or grandparents, friends and siblings just register their credit cards with the affinity program and these programs track purchases at participating stores. UPromise and Baby Mint are examples of affinity programs. Often, investment companies that manage 529 college savings plans also offer rebates to customers. For example, New Hampshire’s college savings plans (The UNIQUE College Investment Plan and the Fidelity Advisor 529 Plan) are managed by Fidelity Investments. Fidelity provides a rebate to its credit card customers in the form of funds directed to a friend or family member’s Fidelity-managed 529 Plan account. Affinity programs are a great way to supplement regular long-term investments.

Savings Bonds

There are two types of savings bonds for college planning: Series EE and Series I bonds. Series EE bonds have a government-backed guarantee to double in value over their initial bond term. Series I bonds can offer a fixed rate of return that adjusts with inflation over time.

In short, the key benefit of using bonds for college is that they're stable, safe, and you can gauge how much interest income they'll generate for college costs. Compared to 529 plans, which have the potential to yield higher earnings, but there's a greater possibility that you could lose money compared to investing in government-backed bonds.

Another advantage is that the earnings on bonds are usually tax-exempt if you're using them to pay for higher education expenses. Visit savingsbonds.gov for rates and more information.

Coverdell Education Savings Account

A Coverdell Education Savings Account is a tax-advantaged education savings account that you can establish for a child under the age of 18. Contributions (currently, a maximum of $2,000) are prohibited once the beneficiary turns 18. To qualify for the plan’s tax benefits, the income of the account owner must fall within certain guidelines detailed at irs.gov in Publication 970 Tax Benefits for Education. This savings plan is also counted as the asset of the parent. Amounts deposited into the account grow tax free until distributed as long as they are used for qualified postsecondary educational expenses such as tuition, fees, textbooks, supplies, equipment, and room and board.

Uniform Trust to Minor (UTMA) and Uniform Gifts to Minor (UGMA)

Uniform Trust to Minor (UTMA) and Uniform Gifts to Minor (UGMA) accounts are established for the benefit of a child. Once created, the beneficiary cannot change and custodianship is terminated when the child reaches the specific age established by state law, typically 18 or 21. While many parents and families open an UTMA or UGMA account to save for college on behalf of the child, the money does not have to be used towards college expenses. Because there is flexibility in how the money invested is eventually used, UTMA and UGMA accounts are considered an asset of the student when completing the FAFSA. Learn more at savingforcollege.com

College Savings Resources

Need Help?

NHHEAF’s Center for College Planning is dedicated to serving all students throughout their education and career planning journeys, for free!