Even if your child won't be in college for at least a few years, check out the many types of prepaid tuition programs that exist - especially if you're looking to pay today's tuition rates. Many times, participants pay for their child's college tuition from the day they are born until the day they enroll. Participants pay a fixed price for tuition based on the rates at that time, while tuition rates increase for non-participants.
Each state that features a prepaid tuition plan will have specific guidelines. There are usually two ways to save:
Prepaid unit plans allow buyers to purchase a fixed percentage of tuition. Plan participants pay the same price for each unit and the price of a unit increases each year. There is no limit on the number of units you can purchase.
Contract plans (also known as guaranteed interest plans) allow the parents to purchase a specific number of year's tuition. The purchase price depends on the child's age, if there is a lump sum payment involved, or if there are monthly installments.
The advantage of a contract plan is that it offers lower rates for younger children because the state holds onto your money longer.
Check your state's rules & regulations for the plan you are considering.
For a list of telephone numbers, and links to the web pages of operating programs, click here. For some states, the plan may have been terminated or the plan information is not readily available. For more information, please contact the individual programs.
Savings plan trusts are investment accounts where parents cultivate their child's education funds. Participants can make deposits of as little as $25 and programs usually guarantee a minimum rate of return. An advantage to this type of funding is the freedom to apply the savings to any college or university.
A savings plan trust, unlike a prepaid tuition program, does not guarantee the current tuition rate regardless of a rise in those rates.
Some states have residency requirements. These states often require that either the participant or the beneficiary be a state resident when the student is first enrolled in the program. The states that do not have such a requirement are open to non-resident investors.
|State||Phone Number||Web Address|
|District of Columbia||800.987.4859||http://www.dccollegesavings.com/|
|Tennessee||N/A||Terminated 529 Plan in 2015|
|Wyoming||N/A||Terminated 529 Plan in 2006|
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