4 Steps to Get Free Money in Your College Savings Account

Credit cards and web shopping sites deliver funds to 529 college savings plans.

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Debra Randall's son got a year's worth of college textbooks for free. Kevin Makler has already amassed $3,000 in a special college savings account for his 10-year-old twins - without putting in a dime of his own money. 

[Read the details of three big college savings rebate programs.]

Both families collected rebates of 10 cents here, $5 there, from various e-coupons and credit card rebates to build up big college savings. "I used to believe credit cards were evil," laughs Makler, who works as an industrial engineer in Raleigh, N.C. But he's on a pace to earn $8,000 toward his children's tuition in a Upromise college savings account by the time they are 18. That's a big and welcome addition to the money he sets aside in another college savings account for them, he says.

Parents who have used the rebate programs say there are four steps to squeezing the maximum amount of free money from the programs:

1. Pay your credit cards off in full every month. Otherwise late fees and interest will more than eat up the value of your rebates, says Makler.

 2. Resist temptation. Don't buy something that isn't on your shopping list just because it offers a big rebate.

 3. Be consistent and persistent. It takes discipline to turn rebate-maximizing into a habit, says Randall. But a few tricks make it easier. Some successful parents set their computer's homepage to shopping rebate sites like Upromise or Babymint so that they get credit for clicking through those sites to rebaters like Priceline.com. Randall is training herself to check more often for coupons and other specials. 

4. Consider family dynamics. One of the easiest ways to increase rebates is to get friends and family to pitch in. But Makler says "it's a tough conversation" to ask a grandparent or uncle to switch from building up mileage for their own vacations to the Upromise or Fidelity credit cards that funnel rebates to a child's college savings account. An easier sell is to ask them to do free and easy things such as registering their grocery loyalty cards at Upromise, or to try to use Babymint or Upromise when shopping online. 

[How safe is your college savings account?] 

Now that she's seen how little effort it took to build up several hundred dollars in rebates for her older son, Randall, of New Haven, Conn., is trying to accelerate her rebates so that she'll be able to pay for as many textbooks as possible for her twin daughters. One started as a freshman at Yale University; the other headed to the College of the Holy Cross this fall. It might not seem worth much effort to register cards with bonus programs to receive, say, a $2 rebate to a college savings account. "But that is $2 you didn't have before, and you were going to buy it anyway," Randall says. "If you start when your children are young it does add up." 

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