California State Treasurer John Chiang announced today that his office has become the first in the nation to offer gift cards – a popular stocking stuffer used by nearly 93 percent of American consumers – as a way of helping Californians give the gift of college.
CA State Treasurer Chiang Launches First-in-Nation ScholarShare College Savings Gift Cards
Available for Purchase at Toys “R” Us Stores
Treasurer John Chiang announced today that his office has become the first in the nation to offer gift cards – a popular stocking stuffer used by nearly 93 percent of American consumers – as a way of helping Californians give the gift of college.
The cards are arriving in 96 Toys “R” Us stores across California just in time for the holidays. Treasurer Chiang forged the partnership with the largest standalone toy store chain in the world to offer the pioneering new product. The cards will also be available at Babies “R” Us, an affiliate of Toys “R” Us, which offers an assortment of products for newborns, infants, and toddlers.
“There is no more time-tested solution to poverty, crime, or income inequality than to make college education an affordable possibility for every child who seeks one,” said Chiang. “Faced with skyrocketing tuition, we must empower Californians to save, invest, and plan for their children’s futures.”
By using a familiar product in an innovative way, never before has it been this easy for relatives, friends, or even a parent’s employer, to help kids save for college.
Saving for college is critical, state educators agree.
“The University of California and the State are doing all they can to ensure that a college education is affordable through financial aid programs, but saving for your child’s education is a prudent financial decision,” said UC President Janet Napolitano. “Saving for future education expenses through 529 college saving programs like ScholarShare is an essential part of preparing our future generation of students.”
“One of the best ways a parent, grandparent, friend, or relative can help children achieve their college dreams is to begin saving early for college expenses,” agreed State Superintendent of Public Instruction Tom Torlakson.
“Opening or contributing to a 529 ScholarShare account for a child is a great way to do that because earnings from funds in the account are not taxed if the money is spent on college expenses.”
The gift cards allow families and friends to contribute to college savings accounts with California’s highly-rated Scholarshare 529 plan in three easy steps:
- Parents or guardians register the child, linking an existing or new ScholarShare 529 plan.
- Friends and family can then contribute by purchasing physical or digital gift cards at any California-based Toys “R” Us or Babies “R” Us retail store or online at www.scholarshare.com
- The gift cards can then be redeemed at ScholarShare.com/redeem and GiftofCollege.com, where funds are then transferred directly to the recipients’ plan.
A recent study by the Journal of Children and Poverty, concluded that kids with savings accounts in their names are seven times more likely to attend college than children without such accounts.
“Thanks to our Toys “R” Us partnership California families now have an easy and convenient way to build a college nest egg and a realistic path to helping their children earn a college degree without saddling them with crippling debt,” Chiang said.
About the ScholarShare 529 College Savings Plan
Named for the section of the Internal Revenue Service (IRS) code under which they were created, 529 plans offer valuable tax advantages. Contributions are made with money that has already been taxed. Once funds are placed in the account, investment earnings, if any, are not federally or state taxed, if withdrawn to pay for qualified higher education expenses.
California’s 529 plan is called ScholarShare. Accounts may be opened with as little as $25. ScholarShare has no annual account maintenance fee, no income limit and offers a high maximum account balance.
ScholarShare, which is governed by a board chaired by Treasurer John Chiang, is ranked as one of the top-rated 529 college savings plans in the country by Morningstar, an independent investment research firm. ScholarShare currently holds over $6.9 billion in assets in more than 278,000 accounts as of 9/30/16.
Gift cards for retail shops and restaurants are common for special events such as birthdays and holidays, but now a first-of-its-kind card is available for college.
The college gift card, which allows friends and relatives to contribute to a person’s college fund, can be another way for parents to save for their child’s tuition. The way the card works is by directing the money to the child’s 529 College Savings Plan.
California State Treasurer John Chiang said the sale for the cards begins this month.
Gloria Yvette Haring with Scholarshare said the earnings students make in the 529 will be able to be taken out tax free. The savings plans can be used in any state, even abroad, and are for any higher education institution, she added.
Juliana Gobin is a mother of two young boys and said the college gift card is more valuable than any toy they could ever receive.
“I feel like our family loves that idea, too. They feel really good knowing that they’re helping us on this path to help (the kids) in the future,” she said.
Chiang said the average student loan debt in the state is $30,000, which is a 4 percent increase from last year.
The gift cards are now available at all Toys “R” Us and Babies “R” Us stores, but you can also purchase them online