How To Save On Your Child’s College Tuition
Taking part in a prepaid tuition plan can save you thousands on the cost of tuition in the future.
(NAPSI)—While it can be difficult to predict what tuition will cost by the time your child attends college, there are two things of which you can be sure:
First, the cost of tuition is sure to go up—and there’s no way to predict how much it will rise.
And second, a smart way to plan for your child’s college education costs may be to enroll in a prepaid tuition plan.
Prepaying for tuition can help you do what most other 529 plans can’t: save on the cost of attending college. And since new tuition rates take effect July 1st, the sooner you act, the more you can potentially save.
With student loan debt recently surpassing $1 trillion, it is important to protect your child from becoming one of the many students who graduate college having to repay huge student loans on an entry-level salary.
Prepaid tuition plans such as Private College 529 let you purchase tuition certificates that are guaranteed by 270+ participating private colleges and universities, including Princeton and Stanford as well as smaller liberal arts schools and research universities. Additional schools can join at any time and new schools will honor any outstanding prepaid tuition. A semester of undergraduate tuition purchased through the plan today will be worth a semester of tuition for up to 30 years—no matter how much tuition rises or what happens in the financial markets.
You do not commit to a particular school when you enroll in the plan or at any point until your student enrolls and you redeem your tuition certificates. Since tuition rates vary among institutions, your contributions purchase different amounts at different schools. You can track how much tuition you own at any of the participating schools anytime by logging on to your account online.
Your prepaid tuition must be held for 36 months before it can be redeemed at a member school. The earlier you prepay, the more you are likely to save over time, but, for example, if tuition rises at a rate of 5 percent per year, enrolling today could potentially save you thousands of dollars by the time your child enrolls. The plan offers the same federal tax benefits as any other 529-college savings or prepaid tuition plan and does not charge enrollment, management or annual fees; 100 percent of your contributions go toward the purchase of tuition.
And don’t worry if your student doesn’t attend a college in the plan. You can name another beneficiary, roll over into another 529 account or request a refund. Savers are being urged to make their contributions by June 30th, before the new rates take effect.
For more information, visit www.privatecollege529.com.