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How ScholarShare 529 can help save valuable time and money for scholarship programs
A scholarship program is one of the best ways an organization can bring positive change to its community. As tuition rates continue to climb, scholarship programs help students achieve their educational goals and pursue rewarding careers–without incurring a mountain of debt.
But administering a scholarship program is no simple task. Many organizations generously offering scholarships don’t have the in-house resources or skills needed to operate the scholarship process effectively and deliver all the possible benefits.
Fortunately, ScholarShare 529, the official college savings plan of California, works with community organizations throughout the state to strengthen the delivery of philanthropic scholarship programs.
ScholarShare 529 can handle all the administration and streamline the task of managing vital scholarship programs.
No Extra Fees, Hassle-Free Administration
Effectively managing and distributing scholarships can be a lot of work. ScholarShare 529 makes it easier by handling all the record keeping and reporting. Once a ScholarShare 529 account is opened for a scholarship recipient, the organization doesn’t have to worry about checks getting lost or funds going unclaimed. Unlike a typical brokerage account, the ScholarShare 529 Administration Program is noncommissioned and has no extra fees.
As Much Control as Desired
When an organization opens a ScholarShare 529 account for a scholarship recipient, the organization controls how the scholarship funds are distributed. For example, when a scholarship is awarded, a separate 529 account in the name of the scholarship recipient can be set up so that funds are distributed directly to the student’s school. This gives your organization assurance that the funds will be used for college education purposes.
Professional Investment Management
The ScholarShare 529 College Savings Plan offers a variety of professionally managed investment portfolios. That means greater return potential, especially compared to funds that simply sit in a savings account. ScholarShare 529 has 19 investment portfolios to choose from and the funds have the opportunity to grow tax-free. As a 501(c)(3), an organization can also withdraw contributions anytime with no federal penalties. (Please consult a tax advisor.)
Matching Grant Program
ScholarShare 529’s Matching Grant Program can maximize the opportunity for scholarship recipients to further grow their savings. The Matching Grant Program, which opened on Jan. 1, 2018, offers a dollar-for-dollar match contribution of up to $200 on new accounts to eligible families – available until Dec. 31, 2018, or until funds are distributed. Additionally, families that establish a monthly automatic contribution plan of $25 or more will receive a $25 bonus. Eligible parents/guardians must be California residents at enrollment, have a valid Social Security number or a federal tax ID number, and have an adjusted gross annual income of $75,000 or less. The account’s beneficiary must be 14 years or younger on December 31, 2018, and the beneficiary cannot have an existing ScholarShare 529 account. For additional information about eligibility, please visit mgp.ScholarShare529.com.
No Scholarship Displacement
Most organizations are not aware that their private scholarships can reduce a student’s demonstrated financial need and thus harm his or her chance of receiving financial aid. But when the funds are placed in a ScholarShare 529 College Savings accountnstead, they bypass any scholarship displacement, making sure your well-intentioned gift has the desired financial effect.
ScholarShare 529’s administration of scholarship dollars can mean more money for students and less time lost for community organizations.
If you think your organization might benefit from the support that ScholarShare 529 can offer, please contact Gloria Yvette Haring at (626)432-6331 or Gloria.Haring@tiaa.org.