529 College Savings Plan Gift Cards Now Available at CVS

CVS shoppers picking up a prescription or a tube of toothpaste can now also invest in college savings accounts for family members and friends.

Gift of College, a crowdfunding platform that helps friends, family, and employers contribute to any 529 plan or ABLE account, announced this week that its gift cards are now sold at select CVS locations across the country.

“I’m personally really excited that a large health brand like CVS can help in spreading the awareness of 529 plans as a great way to pursue higher education while avoiding student loan debt,” Gift of College Founder and CEO Wayne Weber told BestColleges. “You could walk into thousands of CVS stores across the nation and be able to help someone kick off [a college-savings account], help someone contribute to a 529 plan, or help pay down a student loan.”

529 savings plans are tax-advantaged investment accounts designed to encourage saving for future education expenses. Any withdrawals made for qualified educational expenses come with no federal income tax. However, there is a penalty on withdrawals for non-qualifying expenses. All 50 states and the District of Columbia sponsor at least one type of 529 plan with varying restrictions and tax benefits.

However, when Weber wanted to contribute to his nieces’ and nephews’ 529 plan back in 2008, he discovered the process was quite complicated.

“I wanted to do something more meaningful, more impactful,” he said. “I learned what the heck a 529 plan was, but when I tried to gift [529 contributions], it was difficult.”

Weber initially launched Gift of College in 2013 to facilitate crowdfunding for 529 college savings accounts, ABLEnow accounts, or student loan accounts linked to its digital platform.

The company expanded physical gift cards in 2016. They can be found in 8,000 retail locations, online, and in select CVS stores. The purchaser of the gift card pays an additional fee for distribution and processing ranging from $3.95 to $6.95, depending on the value of the gift card.

Gift of College gift cards are redeemable through the company’s digital crowdfunding platform, Weber explained. The funds on the card can be deposited into any 529 plan or student loan account linked on the portal.

“It’s kind of like a gift registry,” he said. “And what you register is your 529 or your student loan account.”

Weber, a self-described “Higher Education Savings Advocate,” told BestColleges that facilitating employer contributions to employee 529 plans or to pay off college debt is Gift of College’s next frontier.

“A trending [employee] benefit has been student loan repayment and student loan assistance, as well as 529 benefits in order to help their employees help their families save to avoid student loans in the future,” Weber said.

“Lots of employers use gift cards in the workspace for rewards and recognition, talent acquisition, retainment, [and] new babies,” he said. “So our gift cards are being used with employers in those sorts of capacities — that’s where a Gift of College is going.”