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Dividends wrongly credited to college savings accounts

Posted: Tuesday, October 16, 2001

FAIRBANKS (AP) -- George Ferree saved half of his 17-year-old daughter's Alaska Permanent Fund dividend for college this year.

The problem, though, is that neither he nor his wife had any idea they were doing it.

So when the couple received notice from the state that $925 of their daughter's dividend had been credited to her account at the University of Alaska College Savings Program, they were a bit surprised.

They are not alone. Every year about 100 people across the state unwittingly participate in the college savings program, program administrator Linda Milliken said. She said human error is to blame for the involuntary financial planning.

In about half of the cases, people accidentally check ''Yes'' on the part of the dividend application that asks about program participation, Milliken said. The other half are the result of data entry errors.

''There are actually people sitting there hand-keying the applications,'' she said. ''There are a small number of keying errors.''

Milliken said the program sent letters to everyone who applied -- whether they intended to apply or not -- in July. But some of those people, might have thrown the letter away since they weren't expecting it.

Ferree said he doesn't remember receiving such a letter but is glad his wife checked their direct deposit notices right away. ''If my wife hadn't looked at the things, I might not have caught it,'' he said.

Ferree's daughter will get the money back, albeit a few weeks late.

Once the program receives the money, it sends a statement to the person holding the account.

''They have 90 days from the day we receive the contribution to request a refund,'' Milliken said. ''If they don't request it within those 90 days, they can still cancel the account.''

However, after the 90 days have passed, the amount refunded depends on market conditions.

Ferree isn't terribly upset about the snafu, but he wishes the refund process wasn't so time-consuming. ''You screwed up, you fix it. Don't make me have to make three long-distance calls and fill out a form,'' he said.

In the future, Ferree said, he will be making copies of all of his family's applications.

Milliken said people should open mail from the program, even if they aren't expecting it.

Anyone who thinks they have contributed to the program in error can contact the program at (800) 478-0003. Refund forms are available online at www.uacollegesavings.com.



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