529 Comparison

Massachusetts 529 College Savings Plans

The 529 College Savings Plan of Massachusetts includes two programs from which to choose.

  • MEFA U.Plan
  • MEFA U.Fund

The Massachusetts U.Plan Prepaid Tuition Program allows Massachusetts families to prepay college tuition at more than 80 participating Mass. colleges and universities. Buy it at today's price and it will pay for tuition whenever the beneficiary is ready for college, even 18 years from now. With the skyrocketing increases in college costs over the last twenty years or so, the MEFA U.Plan can pay great dividends down the road to those who sign up now. One nice thing about the U.Plan is that for federal financial aid calculation, it is treated as an asset of the account owner, so if the parent is the owner, 5.6% is factored into the federal financial aid formula instead of the 30% it would be if the student owned it.You may purchase certificates for as little as $300. Purchases are only made during the annual open enrollment period which falls usually between May 1 and June 30.

Purchase a Massachusetts Prepaid contract and it will guarantee to pay for tuition and mandatory fees at Massachusetts public colleges and universities. Should the beneficiary decide to attend a school that isn't part of the program, the funds with interest will be returned to you. While the big name schools like Harvard, MIT, BC and such don't take part in the MEFA U.Plan, there are some excellent private schools that do. A few of them are Assumption College, Regis College, Merrimack College, Simmons College, Suffolk University and Smith College. Tuition certificates will pay for tuition and mandatory fees, but expenses like room and board, books, supplies are not covered.

The Massachusetts MEFA U.Fund is a 529 program managed by Fidelity Investments that allows you to save for anyone's college education with as little as $15 per month. The U.Fund offers many investment possibilities, including Three Age-Based Investment Options, Six Static Portfolios, Individual Fund Portfolios and The Bank Deposit Portfolio. There are no guarantees with this Massachusetts 529 Plan and the account value can fluctuate up or down depending on the individual investments chosen.

Your investment in the 529 College Savings Plans of Massachusetts will grow federal tax-deferred. One downside to Massachusetts is that there is no State tax deduction allowed for 529 plan investments. Unlike the U.Plan Prepaid Tuition Program, which only covers tuition and fees, funds invested in the U.Fund 529 Plan can also be used for various other educational expenses like room and board, books, supplies and equipment. Qualified withdrawals will also be Federal and state tax free.

For more information on Massachusetts's 529 plan options, visit http://www.mefa.org/saveforcollege/saveforcollege.aspx.