Copied and Pasted by Jeffrey Kam
It sounds like just a new twist on the all-too common Nigerian scams or Madoff-style Wall Street bait-and-switch. But it's true: Some states, businesses, and colleges are really handing out free cash to help build up parents' college savings accounts.
There are a few catches, of course. Nobody should sign up for anything that sounds suspiciously good without doing a little homework. And most of the grants and rebates are comparatively modest: The typical family might reap a few hundred dollars. Few parents will get enough free cash to make up for the average 20-plus percent decline in 529 college savings plans over the past year. (Tax-protected education savings accounts are called 529s after the part of the Internal Revenue Service code that created them.)
Still, those who collect the grants when their children are young or who are diligent about maximizing rebates could generate several extra thousand dollars.
No wonder those handing out the grants say interest is booming. More than half a million people have signed up for at least one of the rebate or grant programs since the beginning of the year. "You may as well get free money," says Joseph Hurley, founder of savingforcollege.com, who says his credit card and shopping rebates have added thousands of dollars to his family's 529.
There are six sources of free cash for college savings: