Using UPromise to Save for College

Consumers today have more options than ever in their attempt to combat rising tuition costs and save for college. One of the most popular (and perhaps easiest) is known as the loyalty program. These are also known as affinity programs; they provide a rebate to the consumer in exchange for shopping at particular retailers or purchasing particular services or products. They are similar in nature to airline frequent flyer programs except that instead of offering free airline miles, they offer a cost rebate toward college tuition.

While there are many of these programs, one of the most popular and well-known of this type of program is Upromise. The basic premise of Upromise is that you register your credit cards (and other store loyalty cards) with them, and they track the purchases you make at participating merchants using your registered cards. This also eliminates the need to have a membership card to Upromise. You can also earn rebates by shopping online through company web sites. This makes the program a painless way to earn a little extra money for college. And the best part of this is that the entire program is free!

One of the key benefits of the program is that you do not need to change your purchasing habits to earn rebates for college savings. The retailer networks associated with this program is large enough that most families will earn some rebates without even altering their spending patterns. Of course, you can maximize your rebates by carefully targeting your purchases, but be careful not to spend just to get a rebate! Another benefit is that the rebates received from a loyalty program such as Upromise are not subject to income tax or sales tax. Be advised though, that the rebates on specific items are different and vary between 4-8%. Consult the Upromise website for more information on the amount of rebate you will qualify for on any specific purchase.

The Upromise program also has some other benefits besides their rebate program that should be considered for those looking for ways to finance college. Upromise offers a low cost 529 plan education savings plan. Like any other 529 plan, they offer the following benefits:

• The earnings grow free from federal or state income tax
• Any qualified withdrawals is free from federal tax
• Savings from your 529 plan can be used at any accredited college
• You can take advantage of estate and gift tax incentives
• You maintain control of the account

Upromise understands that saving now reduces borrowing costs later, and by using a 529 plan, you can reduce or even eliminate the need for college loans. So the unique benefits of an Upromise 529 plan are:

• Quick and easy online enrollment and account management
• Investment management by the experienced firm Vanguard, which features a variety of investment options
• You can open a plan for as little as $50 per month (that’s less than $1.65/day)
• Your Upromise savings can be automatically added to your Upromise College Fund account on a periodic basis each time you reach $25 in Upromise savings

In addition, Upromise offers a student loan feature for those needing additional funding for college beyond savings. They provide extensive information and help in managing government-based student loans. In addition, they offer Upromise-based loans that have unique benefits. Some of the benefits offered are:

• If you’re an Upromise member, your Upromise savings can be used to help pay down your loan by periodic automated transfer into your loan account.
• You can borrow annually up to $40,000. Be advised though that undergraduate and graduate borrowers may not borrow in excess of the annual program expense at their school.
• Upromise offers competitive interest rates
• The entire program is done with an easy, no hassle application process
• Funding can occur in as few as 5 business days from receipt of completed application
• Loan funds may be used to pay past due balances on any other loan.