Srucnoc in 2008

Chml Srucnoc
Chml Srucnoc Links - 10/2/2006
Chml Srucnoc Links - 9/27/2006
Chml Srucnoc Links - 9/28/2006
Chml Links

Article:

The administrators of a Kentucky college savings plan are offering a rebate program that allows participants to earn cash for college when making purchases at many online stores, but financial planners say parents should think twice about spending in order to save.

The Section 529 college savings plan, administered by the Kentucky Higher Education Assistance Authority, is a state-sponsored program with tax advantages that allows participants to save for education-related expenses at accredited colleges across the nation.

The new offering allows account holders to sign up for the Futuretrust cash rebate program, which gives them a percentage of their spending at more than 500 online stores, including Target, Circuit City, Best Buy and The Gap, plus a small number of conventional stores.

That percentage varies depending on the company offering the rebate, but most are between 1 percent and 7 percent.

Account owners can also apply for a Futuretrust MasterCard, to receive a 1 percent rebate on purchases and an extra percent on the other rebates.

"We're trying to extend that benefit to the over 9,000 (Kentucky) account owners," said David Lawhorn, Kentucky Higher Education Assistance Authority program adviser, adding they could receive the benefits and "their normal spending habits would not have to change."

But Louisville financial planner Stuart Coats wasn't sold on the program.

"I think it's probably more trouble than it's worth for a typical parent," he said. "One of the carrots they lay out there is a place like Target … but only Target online is qualified under this program."

He said the cost of shipping would likely be more than the rebate.

"I think in most cases the shipping and handling will outstrip the savings," he said, adding that coming out ahead could require "more thought and strategizing" than most would want to put in.

But Lawhorn said some program users might already shop online and thus wouldn't have to change their habits or incur additional costs. He pointed to the recent rise in Internet usage among new savings-account holders, saying that in the last six months, 62 percent of the new account holders signed up online. Eighteen months ago, the figure was about 10 percent.

Chuck Moore, a Louisville college-planning specialist, said the new program is only beneficial if account holders make sure to use it to their advantage. That means they shouldn't buy things they wouldn't normally buy just to get rebates.

Coats said some credit cards offer higher rebates than the Futuretrust card.

Lawhorn acknowledged that other credit cards could have higher rebates, but said the Futuretrust is the only one that will link directly to Kentucky's savings plan. When rebates total $25, the money is automatically swept into an investment in the user's account.

"This is certainly just one option," he said. "Tied with the online rebates, we feel like it's a strong program and a strong benefit."

The manager of the savings fund, TIAA-CREF Tuition Financing, gets a fee from the bank when credit-card users sign up. The state and the fund manager split any bank fees beyond $15,000. Lawhorn said the money would fund a need-based grant program.

Commentary:

This is a dumb idea.  The places where you can buy are too restrictive and the rebates are too small for there to be any benefit in this.  I don't know if the State oif kentucky is getting any money from the credit card people but I sure my tax dollars arent' paying for services provided freely and done at least as well by the private sector.  Someone with a business degree should have sat down with the people in charge of the Futuretrust cash rebate program before it was allowed to get this far. 

Anyhow, to my knowledge, Discovercard.com and others have rebate cards as much as 5% back on certain purchases and 1% - 3% on everything else.  Those would be a much better option.