The "giving season" is, well, an entire season, so it didn't feel right to dedicate just one week toward covering it. So we're following up last week's guide on donations and charitable acts with a discussion about another way you can give that makes a meaningful difference in someone's life:

Giving the gift of education—through 529s.

The Tea

Prospective college students might finally be getting a financial break. 

Kind of. 

Relatively speaking.

A few months ago, U.S. News & World Report's Emma Kerr and Sarah Wood wrote that between the 2022-23 and 2023-24 academic years, tuition continued their seemingly endless run higher. Private national university tuition rose by about 5%, while in-state and out-of-state tuition at public national universities rose by 4% and 1.4%, respectively.

But at least for public-school students, the pain is actually a gain when you factor in inflation. With inflation baked in, in-state and out-of-state public tuition declined by 0.3% and 2.5%, respectively, during that same time period. And if you look back at the difference between 2020-21 and 2023-24, USNWR writes, in-state and out-of-state tuition has actually dropped by 10% and 13%, respectively, once you factor in inflation.

WealthUp Tip: The 529 is viewed as one of the best ways to save for college, but … what about a Roth IRA?

Also worth noting are recent signals from the Federal Reserve that not only is it pausing interest-rate hikes, but it could actually cut its benchmark rate multiple times next year. That's great not just for incoming students who might need to take out loans, but for anyone who is paying off a private student loan with variable rates—and it's even a potential ray of sunshine for anyone looking to refinance their student loans.

That's great for those about to enter, currently in, or recently out of college. But given historical trends, it's a good bet that people much younger will still have to foot increased costs when it's their time to pack up for the dorms.

We've long suggested that parents start a college fund, whether it's a 529, Coverdell ESA, or other alternatives. And if you're a parent, we think it's a perfect holiday gift for your kids.

But what if you're not a parent? What if you're a grandparent, uncle, second cousin twice-removed, family friend, or the inspirational coach who turned a community-service stint into a case full of hockey hardware?

Well, we have good news for you.

The Take

Anyone who wants to help give the gift of education to a niece, nephew, grandchild, godchild, other family member, or even family friend can do so through a handful of 529 providers and other platforms. In general, parents are expected to foot the vast majority of educational expenses, but I know several people who contribute $20 or $30 every year to other peoples' 529 accounts on birthdays and Christmas. (And indeed, one of my gifts to my adorable, big-cheeked niece, Amelia, is $50 toward her college education—but it's not Dec. 25 yet, so keep this to yourself!)

So, if you want to give to someone's 529 plan this year, here are three popular ways you can do it:

1. Backer

Backer is an actual 529 plan provider that allows other family and friends to play a role.

Whoever is actually opening the account (usually a parent or guardian) answers a questionnaire that simplifies the 529 planning process. It has more than 100 529 plans available, and it makes recommendations best suited to your particular situation. Backer 529s allow you to invest in a portfolio of low-cost index funds that hold large-cap stocks, small-cap stocks, international-company shares, and U.S. government bonds.

Alternatively, a parent who already has a 529 plan can open a Backer 529 account to facilitate their own contributions as well as other family members' gifts.

The account charges no ongoing fees, and contributions can be automated. If you're a "backer" (a family member or friend who doesn't actually own the account), you just need to get a gift link from the account owner, which will allow you to contribute whenever you want. Backer charges a $1.99 flat fee for contributions and gifts.

WealthUp Tip: Here's how much you should save for your kid's college.

2. Upromise

Upromise isn't a 529 provider itself, but instead a platform where you can open an account and earn cash-back rewards that can be deposited into a 529 plan.

If you want to give money to someone's 529 through Upromise, you must open a Upromise account. While you do have the option to link the account to a checking or savings account, the ideal way to go forward is to link it to an eligible 529 plan. (You also receive an enticing bonus ($25) for linking a 529 plan, as well as a $5.29 bonus for verifying your email address.)

From there, you earn cash-back rewards on your everyday purchases, which are automatically deposited into your linked account. You can then set up automatic transfers of your rewards into any eligible 529 college savings plan.

Upromise provides you with several ways to earn. If you sign up for the Upromise Mastercard, you'll earn 1.529% cash-back rewards on purchases if your account is linked to an eligible college savings plan (or 1.25% cash-back rewards if a Upromise account is not linked). You can earn 2.5% cash back at more than 10,000 restaurants with any linked credit card and/or debit card (and 5% if you pay with the Upromise Mastercard). Lastly, you can earn up to $250 in cash back per calendar year on eligible gift-card purchases at MyGiftCardsPlus.

WealthUp Tip: You can spend and save smartly for your kid's college expenses—starting with these big tax breaks.

3. Ugift

Ugift is a service that lets you make contributions to 529 plans administered by Ascensus—a savings program service provider. A parent or other 529 account holder opens a Ugift account, and they're given a unique Ugift code for each beneficiary that they can then send to friends and family members so they can contribute.

If you know you're going to be a frequent gift giver, Ugift suggests you set up a Gift Giver profile, which will save your banking information and even allow you to set up regular gifts.

The downside, of course, is that you can only use Ugift to give to 529 college savings plans that are administered by Ascensus. So if you do want to give to someone's 529, you'll have to determine whether they have an eligible plan and a Ugift account.

Riley & Kyle

WealthUp (Young and the Invested is now WealthUp)

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