- The Washington Times - Sunday, December 3, 2006

Debt is a four-letter word. It lurks in the minds of concerned parents and in the futures of many aspiring college students.

For Carrie Irvin of Bethesda, keeping her children out of debt is a priority. With the birth of her first daughter, now 8 years old, Ms. Irvin began searching for creative ways to start saving for college.

Ms. Irvin and her husband both obtained graduate degrees from private universities, and understand how expensive financing a college education can be.

“We have been very focused on being responsible and forward-thinking,” Ms. Irvin says.

One of the ways the Irvins found to start saving is through a program called Upromise, which was introduced in 2001. Although Upromise is a for-profit organization, it offers a variety of free options to start saving, the most basic being a rewards program.

To participate in the program, parents register their credit, debit, grocery and drugstore cards with Upromise. Whenever they purchase products or services from companies associated with Upromise, a percentage of what they spend goes into their college savings fund.

“My husband and I have been Upromise members for quite some time now … my parents joined, too,” Ms. Irvin says.

To date, Ms. Irvin, her husband and her parents have saved more than $1,000. With two daughters, Ms. Irvin says she is grateful that she can be saving now.

“Our whole mission is to make a college education affordable for every family in America,” says Michael Libenson, senior vice president of marketing and strategy for Upromise.

The Upromise fund for each participant is solely for that person’s use, and is available at any time.

“Without changing the shopping program that we already have, and without spending any extra money,” Ms. Irvin and her family have found that “a little bit can really add up over time.”

The rewards are available on “everything from groceries to gas,” Ms. Irvin says. She buys gas at a participating station, and many of her groceries have the Upromise label.

“I was in the grocery store buying ingredients for our holiday baking, and I was noticing how many products have the Upromise label,” Ms. Irvin says.

“We’re not encouraging people to buy things that they wouldn’t otherwise buy,” Mr. Libenson says.

He advises customers to evaluate their purchases and register their shopping cards, so that when they buy participating products or services they are saving for college.

In the District, residents can save when they buy Upromise products at a participating Giant or Super G, Eckerd Pharmacy, Safeway, CVS, and others. A complete list of stores and products is available at www.upromise.com.

Once money begins to accumulate, says Mr. Libenson, a participant can withdraw the funds, funnel it into a 529 savings plan, put the money toward student loans or even use it to sponsor a local school.

The program “really runs itself,” Ms. Irvin says.

These kinds of savings programs are exactly what parents should be looking into, says Doris Torosian, senior associate director of financial aid at Catholic University in Northeast.

Mrs. Torosian first heard about Upromise at a convention for financial advisers in Vermont.

While Mrs. Torosian has never personally looked into the program, she recommended it to her daughter as an option for saving for her daughter’s children.

The program certainly will not pay for an entire college tuition, however, it means that parents may not have to cut into saving for their retirement to start saving for college, Mrs. Torosian says.

“They should think in terms of things like the Upromise program,” Mrs. Torosian says. “It’s money that you’re saving all along.”

Other programs that Mrs. Torosian recommends include general 529 plans, which allow a child’s parents or guardians to invest money without having to pay taxes when the money is withdrawn.

For District residents, this savings option can come in the form of the DC College Savings Plan, highlighted in October by Mayor Anthony A. Williams. The District’s 529 plan is managed by Calvert Asset Management Co. Inc., in Bethesda.

While the plan is open to anyone, participating District residents can deduct up to $3,000 from their federal adjusted gross income, or $6,000 if the participant is married and filing jointly. This deduction is available “just as an incentive to participate,” says Jeff Dye of the broker operations department of Calvert Asset Management.

“If you’re a D.C. resident, the enrollment fee is waived,” says Mr. Dye.

The cost for District residents is a yearly maintenance fee of $15. For others, however, the initial enrollment cost is $25, and the yearly maintenance fee is $30.

Overall, the most significant benefit of this program, as well as other education savings programs like it, is that the money can be withdrawn tax-free. This is due to the Pension Protection Act of 2006 that President Bush signed into law in August, which secures the tax-free withdrawal of funds saved for educational expenses.

“Most of our students just take out loans and go for it,” says Donte Shannon, a staffer at the office of financial aid at Southeastern University in Southwest.

“Especially with the cost of education rising, it is an excellent idea to start saving when you’re younger,” Mr. Shannon says.

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