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Spend to save – Wealthy families earn most

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A new startup offers customers a way to spend and save for college at the same time, the Associated Press reported July 12.

Beginning this fall, shoppers who buy from companies that partner with UPromise will receive rebates in the form of contributions to a tax-free college savings fund. Up to 5 percent of each purchase will be put into the fund.

One expert says UPromise is missing the point. People who spend a lot of money aren’t the ones that need help paying for college, David Breneman, dean of the University of Virginia’s Curry School of Education, told AP.

Supporters say the program could help the poor, however, because many people can designate one person as their beneficiary.

Founder Michael Bronner acknowledges that the system favors wealthier families.  He and partner Jeff Bussgang have pledged to put the value of more than half of their UPromise stock into a foundation to help the poorest students.

The startup has support from venture capitalists Bill Ford and John Doerr, former Time Warner CEO Nick Nicholas and John Whitehead, former chair of the Federal Reserve Bank of New York.

For full story, see AltaVista.

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