College Education:
A Holiday Gift They'll Never Outgrow

This holiday season, after a difficult 18 months, hard-hit retailers will attempt to entice reluctant consumers with major price reductions and discounts on the latest big-ticket items. Consumers will be slow to indulge, with two-thirds saying the economy will impact their holiday spending and the majority saying they will spend less this year.

As families rethink their gift list, practical and meaningful gifts that return greater value for their purchases may have the most appeal. There is one gift that meets all three of these qualifications — a college education.

According to Fidelity's 2009 College Savings Indicator, 64 percent of parents feel it is their obligation to completely pay for their children's college education, with 60 percent concerned their children will have to make compromises in the quality of their education because of money.

Unlike the retail industry, college tuition will not have a 50-percent-off sale this season. In fact, according to the College Board's 2009 Trends in College Pricing Report, higher-education costs are rising at nearly 5.7 percent per year, higher than the current rate of inflation.

This year, one way parents can ensure that future college costs don't break the bank, while providing an easy way for family and friends to simultaneously check a parent and child off a gift list with one purchase, is to consider investing in a child's education by making a contribution to a tax-advantaged 529 college savings account.

With the U.Fund, Massachusetts' official 529 plan, you can open an account for as little as $50, or just $15 a month with automatic contributions, and anyone — grandparents, aunts, uncles, and friends — can contribute. That's less than the cost of an mp3 player.

Over the years, gifts have played a relatively small role in offsetting the overall cost of college, covering only five percent of the cost. While this may seem like a small dent, 38 percent of parents say they use gifts to help with college expenses. This holiday season, families can help make that dent bigger by contributing to, or opening, a U.Fund account.

For those wanting to have a child open more than a check, a sweatshirt with the name of their alma mater or a hat featuring the child's favorite college sports team, are both fun ways to present their 529 gift.

As an added bonus for Massachusetts residents, Fidelity and MEFA are also offering a $50 Target GiftCard to anyone opening a U. Fund account by Mar. 31, 2010.*

The holidays are a wonderful time for families to begin saving for college, and they can also serve as a yearly reminder for parents to reach out to family and friends and have them contribute to an existing 529 plan, taking the guesswork out of gift-giving.

For more information about the U.Fund College Investing Plan, visit or call 1-800-544-2776.

* U.Fund Plan GiftCard Offer Terms and Conditions

1. Offer Description. The U.Fund College Investing Plan ("U.Fund Plan") is a 529 college savings plan administered by MEFA and managed by Fidelity Investments® ("Fidelity®"). To receive a $50 Target GiftCard (a "GiftCard"), eligible individuals must (a) open a new account under the U.Fund Plan (a "U.Fund Account") within 30 days of registering for the GiftCard offer between August 24, 2009 and December 31, 2009 and (b) establish an automatic investment plan for the U.Fund Account of at least $50 per month, with the initial $50 automatic investment contributed and invested within 90 days after the U.Fund Account is opened. Limit: one (1) GiftCard per person. The U.Fund Account must be individually owned (no trust, custodial or other relationship arrangements).

2. Eligibility. Offer open only to individual legal residents of the Commonwealth of Massachusetts, age 18 or older as of August 24, 2009 and excludes the following: (a) employees of Fidelity and MEFA and their respective affiliates, including immediate families and members of the same household; (b) FINRA affiliated customers; and (c) individuals who have received any gift, premium, prize or non-cash compensation from Fidelity during the 2009 calendar year.

3. GiftCards. GiftCards are subject to the terms and conditions stated thereon and otherwise specified by their issuer, Target Corporation. All taxes and other costs associated with the acceptance and use of GiftCards are solely the responsibility of the recipient. GiftCards will be mailed by United States Postal Service to the mailing address provided on the GiftCard Registration Form. Allow 8 –10 weeks (from date of qualification for GiftCard) for GiftCard delivery. GiftCards will be issued only in name of the U.Fund Account owner.

4. Plan Investment. If you or the designated benefi ciary are not Massachusetts residents, you may want to consider, before investing in the U.Fund Plan, whether your state or the designated beneficiary's home state offers its residents a 529 college savings plan with alternate state tax benefi ts or advantages. Units of the U.Fund Portfolios are municipal fund securities are subject to market volatility and fluctuation and may lose value. Please carefully consider the U.Fund Plan's investment objectives, risks, charges and expenses before investing. For this and other information on the U.Fund Plan, call or write to Fidelity for a free Fact Kit, or view one online. Read it carefully. The tax information contained herein is general in nature, is provided for informational purposes only and should not be construed as legal or tax advice. Fidelity does not provide legal or tax advice. Laws of a particular state or laws which may be applicable to a particular situation may have an impact on the applicability, accuracy or completeness of such information. Consult an attorney or tax advisor regarding your specific legal or tax situation.

5. Miscellaneous. Fidelity and MEFA ("Sponsors") are not responsible for late, lost, damaged, incomplete, illegible, misaddressed, postage-due, stolen or misdirected U.Fund Account applications, contributions, mail or GiftCards, or for errors, omissions, interruptions, deletions, defects or delays in operations or transmission of information, in each case whether arising by way of technical or other failures or malfunctions of computer hardware or software, communications devices, data corruption, theft, unauthorized access to or alteration of offer materials or otherwise. Sponsors reserve the right (a) to modify, suspend or terminate this offer should any technical failure, unauthorized human intervention or other causes beyond Sponsors' reasonable control corrupt or adversely affect the security, administration or proper conduct of this offer and (b) to disqualify any individual who tampers with the offer process.

Please carefully consider the Plan's investment objectives, risks, charges, and expenses before investing. For this and other information on any 529 college savings plan managed by Fidelity, call or write to Fidelity for a free Fact Kit, or view one online. Read it carefully before you invest or send money.

MEFA is a not-for-profit self-financing state authority that works to make higher education more accessible and affordable for students and families in Massachusetts through community education programs, college savings plans, and low-cost financing options.

The U.Fund® College Investing Plan is offered by MEFA and managed by Fidelity Investments. If you or the designated beneficiary is not a Massachusetts resident, you may want to consider, before investing, whether your state or the beneficiary's home state offers its residents a plan with alternate state tax advantages or other benefits.

Units of the portfolios are municipal securities and may be subject to market volatility and fluctuation.

© 2009 Fidelity Investments. All rights reserved. All trademarks and service marks used herein are the property of their respective owners. Fidelity Investments, MEFA and Target Corporation are independent, non-affiliated entities.