Gift Of College Review: 529 Plan Or Student Loan Gift Cards

Gift of College is a service that sells gift cards for 529 plans or student loan repayment. The also allow easy gifting through an online portal.

When deciding what to give someone heading to college, what could be better than contributing to their college savings fund? Or, if they're in school, how about a gift that helps pay down some of their student loans?

While those may sound like great gifts, it’s actually not easy to do. If you want to add funds to someone’s 529 plan, you have to get all kinds of personal and account information. It’s the same thing with student loans. That can be a high barrier to giving.

Gift Of College has come up with a better way to help out on school tuition. All a student has to do is sign up with Gift Of College and let contributors know. Contributors then simply buy a gift card in the amount they want to give. The recipient then directs the gift card funds to their 529 plan or student loan. Easy. In this article, we’ll look at the details of how it works.

What Is Gift Of College?

Gift Of College is a crowdfunding platform for paying down student loan debt and saving for college. It was founded in 2008 by Wayne Weber. The company is based in Phoenix, AZ, and is a for-profit company.

“I found out that in order to contribute to someone else’s account as a gift-giver, I would need to ask the account owner which plan they were investing in along with their account number. I’d then need to fill out deposit coupons, write checks and mail them. So much for a holiday surprise!...There had to be an easier way,” Weber said to Authority Magazine.

What Does It Offer?

Rather than contributing directly to someone’s student loan or 529 college savings plan, Gift Of College allows you to bypass the complications of gathering account info and instead just send a gift card. Of course, the person you're gifting to needs to have an account with Gift Of College. But from there, it’s a fairly easy process.

Parents, friends, employers, and yourself (i.e., student) can all contribute through gift cards. Gift Of College allows contributions to 529 college savings, 529 ABLEs, or student loan accounts linked to a person’s profile. Gift Of College doesn’t set up 529 plans. Those will need to be set up outside of Gift Of College.

The benefit that Gift Of College is offering is the ease of contributing to someone's 529 plan or student loan. Traditionally, anyone contributing to either would need personal and account information to contribute. With Gift Of College, all the contributor needs is a gift card and account number.

How Does It Work?

Once you create a Gift Of College profile, you'll link your student loan or 529 plan to your Gift Of College profile. You will then get a profile URL which you can share with family or friends who can donate to your plan.

Buy Gift Cards

Anyone who wants to contribute to your 529 plan or student loan simply purchases a gift card for your account. Cards can be purchased through the Gift Of College website or in certain stores.

Once a gift card is purchased for an account, funds are routed immediately to the appropriate loan or 529 plan. For that reason, gift cards can’t be refunded. Funds will always go to the right place because of the link between the gift card and 529 plan or student loan.

Gift cards can be purchased for $25-$200. Digital and physical gift cards are available through Gift Of College or at over 3,000 retailers, including Target, H-E-B, Fred's, Save Mart, Brookshire Brothers, Lucky Supermarkets, and FoodMaxx.

Redeem Gift Cards

Recipients can redeem gift cards through their account by selecting “Redeem Gift Card” and entering the Gift Code. Once you've redeemed your card, Gift Of College says that it can take up to 14 days for it to be credited to the designated account.

Exchange Gift Cards

Do you have a unwanted gift card sitting in the back of your wallet or dresser drawer? On the Gift Of College gift card exchange (powered by CardCash), you can turn that gift card into a 529 contribution or student loan payment.

Simply enter your card and pin number to receive an offer in seconds. If you approve the offer, Gift Of College will mail you a eGift card that can be credited to your linked student loan or 529 account.

Related: Best Online Gift Card Exchanges

Are There Any Fees?

Yes - when gift cards are purchased on the Gift of College website, the contributor is assessed a 5% fee, which is capped at $15. The following are example fees for various cards:

• $3.95 for a $25+ gift card
• $4.95 for a $50+ gift card
• $5.95 for a $100+ gift card

Gift Of College doesn't publish a fee schedule for its store-purchased cards. It's likely that you'll still have to pay a convenience charge but it could be less than what you'd pay for buying your card online.

Physical cards that are mailed (rather than sent digitally via an instant link) from Gift Of College also have the following shipping fees:

• USPS First Class Mail (9-12 days): $1.95
• USPS Express Mail (3 days): $9.95

The recipient of the gift card is not assessed a fee in any situation.

Here's a quick comparison of how Gift of College compares to other popular saving for college tools:

How Do I Open An Account?

You can go to the Gift Of College website to open an account. There are no account set up or maintenance fees and it's completely free to redeem gift cards.

Is My Money Safe?

Yes. Once a gift card is purchased, the money is immediately routed to the recipient’s 529 plan or student loan.

Is It Worth It?

Gift Of College can be worth it if you want to avoid the hassle of requesting personal information and you know someone that has set up an account. It could also be a good fit for "one-off" fundraising events like holidays or birthdays.

However, if you plan to contribute regularly to someone's account, the per-card fees charged by Gift of College can add up quickly. Plus, keep in mind that Gift of College doesn't actually provide 529 accounts or offer investment advice. You'll need to open a 529 plan with a separate provider before you can begin receiving gifts.

If you prefer all-in-one solution, a subscription-based platform such as Backer (starting at $1 per month) or UNest (starting at $3 per month) may be a better fit. Both platforms offer age-adjusting portfolios and allow family and friends to send unlimited gifts.

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