The idea for a Section 529 college savings plan gift registry came to Jeff Frese last year at a birthday party for his 4-year-old niece.
The idea for a Section 529 college savings plan gift registry came to Jeff Frese last year at a birthday party for his 4-year-old niece.
Watching the birthday girl happily playing with empty opened boxes and ignoring her expensive presents, he had a revelation: What if he could have put the money he spent on her gift directly into her college savings account?
The thought has become reality. This month, Mr. Frese, founder of Dorado Capital Inc. in New York, launched the beta version of FreshmanFund.com, a website that allows friends and family members to contribute money directly into a child's 529 account.
The service is free, but Mr. Frese hopes to make money by selling customized cards on the site.
Partnering with Future Trust, a Philadelphia-based rewards company that also works with state 529 plans, he will offer consumers a co-branded "affinity" credit card on the site.
One percent of money spent using the card will go directly into a designated 529 account. In addition, Mr. Frese hopes to become a registered broker-dealer by the end of the year and sell 529 plans on the site.
He is relying on "viral growth" on the Internet to drive traffic to the site, which is "already generating buzz in the blogosphere," he said.
"FreshmanFund appears to be an innovation that simplifies life and simultaneously accomplishes a worthwhile objective," said Troy Onink, a college funding expert and co-author with Lloyd Paradiso of a book, "Strategy & Simplicity for Private School and College Funding" (Stratagee, 2008). "When the toys are long forgotten, the wisdom and generosity of contributors to a 529 plan will be remembered."
