Survey: Interest in Swapping Holiday Gifts for College Savings Grows

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December 9, 2020

What would you rather your child receives for the holidays – a traditional gift or a contribution to a college savings fund?

We recently surveyed 1,168 of our readers, and found while interested in gifts to a college fund, many parents aren’t quite sure how to ask family and friends for money or even how gifting to a college savings plan works

There are many benefits in opting for a college saving contribution. It creates less clutter and waste since clothes and toys are quickly outgrown. For gift givers, it can save time and eliminate the guesswork of what to get. But most importantly, every dollar saved for college or future education costs helps.

“The beauty of making a gift contribution to a 529 account is that it’s something that can hold long-term value. It’s not a toy, game, or electronic device that a child might otherwise grow out of or lose interest in,” Peg Creonte, President of Government Savings at Ascensus said. “It’s a truly meaningful gift that demonstrates for that family and beneficiary that you are invested in their long-term success.”

The good news is, it’s never been easier to receive money for college from family and friends willing to contribute. Gift givers can contribute through a link shared via text, email, or social media; download a gift card to ship or send virtually; purchase a physical gift card at popular stores; or even give a check to the plan or check or cash to the parent, if they aren’t saving in a 529 plan.

“At a time when families are carefully evaluating the costs of higher education, 529 education gifting tools can make saving easier while sending a powerful message on the value of setting long-term goals,” College Savings Foundation Chair Vivian Tsai said in a press release. “Whether the funds will go to a community college, technical school or a traditional 4-year college, these gifting programs provide a foundation for a child to plan and prepare for their future.”

However, in our survey, we found that only 33% ask family and friends to contribute to their child’s saving fund for holidays, birthdays, or other gift-giving occasions, and almost half (48%) don’t expect any gift contributions at all to help pay for college.

About 10% aren’t sure how family and friends could make a contribution and 3.6% didn’t even know it was an option. Almost 40% weren’t aware that, depending on the state a person lives in, a gift-giver making a contribution to a 529 plan could potentially qualify for an income tax deduction or credit.

Despite many parents not taking advantage of it, 70.3% said that 529 plans offering a gifting platform is either “important” or “very important” when choosing a 529 plan

The Current Status of College Fund Gift-Giving

“Gifting to 529 plans continues to get easier. Some plans offer convenient online tools for account holders to share links with friends and family members where they can go to give gift contributions online, says Dan Rauenzahn, Vice President of College Savings Plans at T. Rowe Price. 

“A gift giver can, in many instances, mail in a check with a contribution slip with information provided by the account holder. It’s best to ask someone how to give to their or their family’s 529 plan.” 

Rauenzahn also points out that there could even be an extra bonus for family and friends who contribute depending on where they live. “Giving a college fund contribution as a gift may provide state income tax benefits to the gift giver depending on the state they live in and what plan they contribute to,” he says. “They should share the details of any gifts they give with a tax professional to determine this.” 

Many 529 college savings plans are reporting an increase in gifting, according to a press release by College Savings Foundation, including:

  • Ugift contributions grew from 438,867 in 2018 to 621,198 in 2019 to 529 accounts administered by Ascensus. There was also a 20% year-over-year increase in total dollars gifted to Ascensus 529 plans. The median gift amount in 2019 was $100. 
  • Alaska 529 and T. Rowe Price College Savings Plan have seen a 10% and 13% year-over-year growth in gifting last year respectively. Both use GoTuition, which is an online gifting portal that allows people to ask for gifts via email, evites, or social media. 
  • Utah’s My529’s gifting program platform has grown by 17% over the past two years. The platform links friends and family to a personal gift page where they can contribute with the gift code online through or download a gift notice about a contribution by check.
  • Virgina’s 529 saw a 58% year-over-year increase in gifting transactions and a 96% increase in dollars contributed. Family and friends can access a Gift Center for digital gift cards, get co-branded gift cards available at, participating Target or H.E.B. Grocery locations, or download gift certificates for a variety of occasions from its website.

Despite this growth, not everyone is taking advantage of gifting to grow their college savings. In our survey, more than 40% of respondents did not receive any gift contributions last year. On the other end of the spectrum, more than 9% received more than $1,000 and almost 5% received between $500 and $999.

Although many parents aren’t asking for or receiving gifts, more than 68% say they would contribute to a college savings fund if a family or friend asked them to for holidays and birthdays. Another 18% said they would contribute to the college fund and also give a traditional gift.

Parents that have received contributions are mostly receiving by direct cash or check to the parent (55%) or using a 529 plan’s online gifting platform (40.6%). Other ways include sending a check directly to a 529 plan (18.1%). 

How to Ask for College Fund Contributions for the Holidays

The biggest reason parents aren’t asking for contribution is because they would not ask for money (45.9%) or they feel uncomfortable and don’t know how to ask (35%).

Other reasons for not asking for college fund contributions in lieu of gifts include: thinking people would not want to or be able to contribute (16.1%), already saving enough (11.3%), or prefer children to receive gifts (7.6%). 

Almost 44% of parents said it would be easier to ask for college contributions if a family member or friend specifically asked for gift suggestions, and 41% said that it would be helpful if there was a link they could easily share via text or email.

About 24% said it would make it easier if family and friends could purchase a gift card for college savings, and almost 20% said if there was more information on how gifting works. 

The great news is, sharable links and gift cards already exist. As mentioned above, many 529 plans offer a variety of ways to easily make a contribution with online registries, crowdfunding style websites, e-gift cards, and downloadable gift certificates. 

“Through Ugift, we offer templates and social media shares in which parents can add their own unique gifting code to help spread the word,” Creonte says. “We understand that for some, it can feel awkward to ask for 529 gifting contributions. That’s why we recommend that parents incorporate this into their conversations with families and friends about upcoming milestones for the beneficiary, such as a birthday, graduation, or major holiday.”   

Nebraska’s NEST 529 Direct and Advisor College Savings Plans, for example, offer a new program called GiftED, which sends invitations asking for contributions. 

Besides all of the gifting innovations from 529 plans themselves, there are several third-party options for college gifting as well, including:

  • CollegeBacker is an online program which allows parents to open and manage a 529 plan right from their phone. Every child has their own personal gifting page where family and friends can send a contribution and allows them to track the saving progress. (Read our full review of CollegeBacker.)
  • Gift of College gift cards can be purchased right online for parents to put into a 529 college savings plan. You can also find physical Gift of College gift cards at more than 3,000 retail locations, including Target and on
  • Upromise is an online platform that allows people to sign up for free, link a 529 account, and earn cash back for college while shopping on their online portal. While you can’t exactly give a gift through Upromise, grandparents or family members can sign up and earn cash back from every day purchases. There are also options to link credit cards for cash back on dining.

If a family member asks for gift suggestions for a child, parents could bring up the idea of contributing to a college fund.

In many cases, a link can easily be shared via email or text. Parents who aren’t comfortable directly asking for contributions can share a link on their social media page, on a holiday card, or on an invitation to a party. 

“One way to suggest a 529 gift contribution in lieu of a traditional gift, is to be specific about what the contribution would ultimately provide,” Rauenzahn suggests. “For example, saying something like “Help us fulfill Ava’s dream of being a Veterinarian! Consider giving the gift of education to help us send her to college.” 

For family and friends who still want to see the child open a physical gift, there is the option of doing both. Simply divide whatever amount you were planning on spending to a less expensive material gift and the other half to a college savings account. 

For parents who would like gifts to a college savings can lead by example. If friends and family members have kids themselves, initiate a new tradition by giving a contribution in lieu of or in addition to a physical gift. “We like to emphasize that any 529 contribution, no matter how small, can help 529 account owners and beneficiaries get that much closer to their education savings goals. Any dollar saved today is one less that might need to be borrowed in the form of student loan debt in the future,” Creonte says.

At, our goal is to help you make smart decisions about saving and paying for education. Some of the products featured in this article are from our partners, but this doesn’t influence our evaluations. Our opinions are our own.

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