If you like the idea of prepaying tuition but are looking for more flexibility in school choice, then the Independent 529 plan might appeal to you.
Like other
prepaid plans,
you purchase future tuition at today’s rates — so no matter how much the cost of tuition rises in the future, your cost is locked in.
Unlike other prepaid plans, however, your beneficiary isn’t limited to the schools
in one state, but can use the tuition benefit at over 270 private colleges and
universities across the U.S.
You’ll receive a discount of at least 0.5% on current tuition rates — and many schools offer a substantially bigger break. That means an investment of $14,250 would buy at least $15,000 of tuition at today’s rates. The Independent 529 plan carries no sales, enrollment, or maintenance fees. And you do not owe federal income tax on any increase in the value of your account.
Unlike 529
savings plans, the funds in your Independent 529 plan
account can only be used to pay for undergraduate tuition
and mandatory fees. You cannot use your account to
pay for books, supplies, room, board, or other educational
expenses.
Holding tuition credits
in the Independent 529 plan doesn’t guarantee your
beneficiary admission to any particular school. If your beneficiary
doesn’t end up at one of the participating schools,
you may receive a refund equal to the original value of your
purchase. Provided the beneficiary uses the money for qualified
education expenses, you’re still eligible for the tax
benefits of participating in a 529 plan.
To learn more about
the Independent 529 plan, you can visit the plan’s Web site
at:
www.independent529
plan.org.
