These days, saving for college can seem like a daunting prospect. College costs are distinctly on the rise. Between 1987 and 2017, the average tuition for a public four-year institution increased by a whopping 213 percent, and the average tuition for a private four-year institution increased by 129 percent. That’s why it’s unsurprising that many families’ fears about their ability to pay for college are also on the rise.
U-Nest, a FinTech startup based in Los Angeles, is on a mission to make saving for college realistic for families of any income level. U-Nest’s digital investing platform effectively takes the fear, complexity, and confusion out of the process. The company’s mobile app (currently available in iOS) is winning fans and helping families get on track toward saving for their kids’ college funds.
Distillery has been privileged to help U-Nest turn their dream into a reality. We sat down with U-Nest founder and CEO Ksenia Yudina — herself a parent of three young children — for a Q&A about what the app does, how its user experience is central to its value prop, and the “a-ha” moment that made it all happen.
Q&A with Ksenia Yudina
Distillery: What is U-Nest?
Ksenia Yudina: U-Nest is a simple, affordable solution that helps parents quickly and painlessly begin saving toward their children’s college funds. Our intuitive, easy-to-use mobile app helps you set up and manage 529 College Savings Plans. It literally takes five minutes to set up.
After setup, U-Nest automatically makes monthly money transfers into your child’s plan through a secure link to your bank account. You can track your progress toward your goals at a glance. It’s all paperless, and it’s totally secure. Also U-Nest is a fully accredited and registered financial advisor with the Securities and Exchange Commission. That means you get a college savings plan backed by advisors and experts you can trust.
U-Nest wants to make it possible for families from every economic background to have a realistic route to financing their children’s education. In the US, the process of saving for and financing higher education costs can be incredibly confusing. We want families of all income levels to know that it’s within their power to help their children achieve their educational goals.
Distillery: Why is U-Nest focused on 529 plans?
Yudina: Financial experts agree that 529 College Savings Plans are the absolute best way you can save for your children’s education expenses. Sponsored by states, state agencies, and educational institutions, they’re authorized by Section 529 of the Internal Revenue Code — hence the name. Basically they offer considerable tax advantages, as well as impressive investment options.
Distillery: When did you realize there was a problem to be solved?
Yudina: There was a very specific moment when I realized that this was a problem I wanted to help solve. About a year ago, when I was working as a financial advisor for the Capital Group, I was talking with a client — a mother of two — about saving for her children’s education. I spent more than two hours with her, explaining why 529s were undoubtedly the best way for her to save, guiding her through her options, and answering her questions. I helped her open accounts for each of her children, which meant we worked together to fill out the details of very complex 15-page applications. That involved faxing, copying, and emailing all sorts of paperwork. But ultimately she left happy, feeling confident she was doing the right thing for her children’s future.
To be clear, this was a typical situation for me on a typical morning at work. I’d been working for Capital, a company that manages more than $1.7 trillion dollars, for the past four years. This meant I’d been working mostly with wealthy clients. But my conversation with that client — a client I could see myself in, in some ways — made a light bulb go off for me.
My client was lucky to be able to work with a high-priced investment consultant like me to make these plans for her kids. She has time and resources not all parents have. Frankly, millions of families out there aren’t nearly as fortunate. They can’t afford to work with an advisor like me. My own parents couldn’t afford it. I had to pay off over $150,000 toward my own higher education expenses. I don’t want that for my kids. Nobody wants that for their kids.
So that’s when I decided to do something about it. I wanted to give less affluent families a simple, cost-effective way to secure their children’s educational future. With my experience, tools, and background, I felt I had the skills to create that solution. That’s why I founded U-Nest. Now, all parents — regardless of how much money they have, and regardless of how much finance and investment knowledge they have — have a smart, realistic path toward saving for their kids’ educations.
Distillery: How does U-Nest ensure that parents will succeed in their college savings plans?
Yudina: Because U-Nest makes everything so easy, transparent, and flexible. Parents set goals and then track their progress toward those goals. They can quickly and clearly see how their 529 plans are performing, looking at things like projected growth and tax savings. And the 529s are constantly optimized behind the scenes to make sure their money is invested in the smartest possible way given the age of their kids and the expected risks and returns of the investments.
Also, U-Nest uses a really great 529 plan. Our team of financial experts looked at hundreds of 529 plans from various providers before selecting the plan we use. The 529 we ultimately selected, the CollegeBound Rhode Island plan, is managed by Invesco, one of the most well-established investment firms in the US. They’ve been around for more than 80 years. So parents can be confident their investments are being well-managed.
Finally, U-Nest’s flexibility is really important. It keeps the process based in reality. Because we know it’s not always realistic for parents to commit to putting in the same amount of money every month. That’s why parents can easily adjust their monthly contributions at any time. And when it comes time to withdraw money to pay for educational expenses, it’s easy to do that, too. Parents can withdraw money for things like tuition — both for college and for K-12 — as well as books, computer equipment, and other qualified expenses.
Distillery: How important is U-Nest’s user experience in convincing users that the process of saving for college doesn’t have to be difficult?
Yudina: U-Nest’s user experience is exceptionally important. It takes something that can be quite complicated and makes it easy. In fact, only 14% of US families use 529 plans to save for their children’s education — but only because the typical process is so complex. Figuring it out on your own isn’t easy. Working with a financial advisor to do it takes time, money, and a ton of paperwork. So it’s not surprising parents were overwhelmed by the process and all its unknowns.
U-Nest honestly makes it easy. We really focused on creating a seamless user experience. For example, we made the sign-up process so simple that it genuinely takes only five minutes to create an account. During the beta test, everyone acknowledged how fast and easy the whole process was. I specifically liked when one parent told us, “I was able to sign up with two kids in the room, which is a super-important aspect — needs to be ridiculously simple, which you have achieved. Kudos on that!” Of course, we were delighted to hear that. It means we achieved our goal of making a seamless user experience. Because I know that it’s no small feat to get anything done with two kids in the room!
Distillery: What can we look forward to in future versions of U-Nest?
Yudina: In the next version of the app, we’re going to give parents even more control in selecting the frequency and timing of their contributions. We’re also incorporating a very cool gifting feature that allows friends and other family members to contribute directly to your child’s account. You just send them a shareable link. Our users seem really excited about the feature, and we can’t wait to add it. In addition, we’re working on launching the Android version of the app, since many parents who use Android smartphones have been wanting to use our solution.
College, Here We Come
Higher education costs are still daunting. Thanks to Yudina and her team at U-Nest, however, the process of saving for college is no longer quite so daunting. That’s a user experience success story we’re proud to be part of.
Distillery is passionate about helping to make higher education possible for more students. If you know a student majoring in computer science, software engineering, IT, or a related area of study, let them know about our scholarship program! And if you’re interested in working with Distillery to create your own innovative app, let us know.
Ksenia Yudina, CEO founded U-Nest with a mission to solve $1.5 Trillion student debt problem in the US by bringing simple and accessible financial advice to young parents. Ksenia is a financial expert and entrepreneur with over ten years of experience in the financial industry. Most recently, as a Vice President at Capital Group/American Funds (the largest 529 plan provider in the US), she has developed a deep expertise into financial planning and wealth management. Prior to that, she founded and operated a Real Estate company specializing in residential short sales. Ksenia holds an MBA from UCLA Anderson School of Management and a CFA Charter.