From paycheck to pathway: Leveraging direct deposit to build education savings

From paycheck to pathway: Leveraging direct deposit to build education savings

April 3, 2026

The University of Alaska plays a vital role in supporting the long-term health and well-being of faculty and staff and their families by offering competitive benefits, employee support, and an environment that supports both continuing professional education and the future educational pursuits of family members. As open enrollment opens, I want to remind you about one practical, often underutilized benefit and tool for building education savings: payroll direct deposit into an Alaska 529 education savings plan account.

Over the past several years, the definition of qualified expensesfor education savings plans, commonly known as 529 plans, has expanded significantly. These accounts are no longer limited to traditional college expenses. They can now be used for a wide range of post-secondary (post-high school) credentials through recognized programs. This includes many of the certifications, endorsements, and training programs required for continuing education and credentialing and offered right here within the UA system.

In a state like Alaska, where accessing education and training can require significant time, travel, and expense, this flexibility matters. It creates more opportunities for individuals to invest in their own professional growth, as well as in the futures of their children and families.

While there are many ways to save, one of the simplest and most effective is through payroll direct deposit. UAOnline allows employees to allocate their post-tax paycheck across multiple Alaska 529 accounts, with just a few clicks.

I've taken this approach myself, setting aside $75 from each paycheck into an Alaska 529 account, with the remainder going to my checking account for everyday expenses. It's a small, manageable amount, but the consistency is what makes the difference.

Over time, contributions add up. Saving $75 per paycheck adds up to $1,950 per year. Over 18 years, that totals roughly $32,000, assuming no investment growth. With an average annual return of 6% in a tax-advantaged account, those same contributions could grow to approximately $58,000. That is the power of starting early and saving consistently.

Payroll direct deposit makes this process automatic and predictable. It also creates an easy opportunity to increase savings over time, whether by adjusting contributions with a cost-of-living increase, directing a portion of a bonus, or adding occasional "extra" contributions from gifts or other windfalls.

How do I set up direct deposit from my paycheck?

1) Open an Alaska 529education savings plan account.

2) To set up direct deposit to make a single or recurring contribution, enter the following information into UAOnline:

• The routing number: 011001234(The Bank of New York Mellon)
• Your 9-digit Alaska 529 account number with a 704 prefix (example: 704A8XXXXXXX)
• Select checking
• Add the amount to be deducted per pay period

UA has made it easy for employees to start and save directly from their paychecks, helping to create stronger financial foundations and expand access to education and training opportunities across Alaska.

Accounts opened with at least $25 in 2026 can receive the $250 Dash to Save®incentive. Individuals who contribute through recurring methods, such as payroll direct deposit, can receive an additional $100 Dash to Save More®incentive each year they actively contribute through this method. $350 is not a bad way to kick off your savings journey.

Contact our team at [email protected] to find out how we can help you and your team plan and achieve education savings goals.