CALIFORNIA—For parents and guardians looking for a different route in saving for their children’s college, there is the Private College 529 Plan. This plan is a prepaid tuition plan and Canyon News spoke with the President of the Private College 529 Plan, Nancy Farmer, to find out more about it.
“So you open an account and between now and July 1 you put in $10,000. You now own the equivalent of $10,000 in tuition at any of the 283 schools,” said Farmer as she started to explain the plan that is supported by 283 schools across the United States. Of those 283 schools, 20 are in California, as shown on Private College 529 Plan’s website, including Pepperdine University in Malibu and Stanford University in Northern California.
The $10,000 can be used at any of the 283 schools, and what the $10,000 that is bought before July 1, when tuition prices are set to change, purchases is a portion of the tuition. Farmer gave the example that if someone purchases .22 of a year at Stanford today, 10 years from now it will still give the student .22 of a year at Stanford.
“A top concern for families today: how are they going to pay for college when tuition increases are outpacing household income increases,” said Farmer.
With a Private College 529 Plan they make all the calculations as to what portion of a school year is bought at any given time, they do not charge any fees, and it is the schools themselves that take the financial risk. Even if in 18 years the student decides they do not want to attend any of the schools that are supported by the 529 Plan, the assets can be transferred to a different account or refunded.
They recommend that a savings plan is also opened alongside a Private College 529 Plan, because the 529 Plan only covers undergraduate tuition and fees. Farmer said that there are not enough families saving for college, so they also recommend using the universities’ net price calculator to figure out the actual costs of college, and to not bank on a student getting the rare full-ride scholarship.
“It breaks my heart that families make a decision about where their kid is going to go to school not based on the best match for the school, not necessarily the best institutions the kid has been accepted to, but the least expensive,” said Farmer. She wants to “ensure every student can attend the school that is the best fit for them.”
Farmer wants the Private College 529 Plan to be as accessible to families as possible. There is a monthly purchase plan as low as $25 a month, because, at the minimum, $500 has to be accumulated within two years. They also suggest creative ways for other family members to get involved by depositing into the account on holidays or for birthdays.
The importance of college for future generations could not be stressed enough by Farmer. She said that there is so much data out there saying how college graduates make more money, get a better chance at getting employed, and a better quality of life.
For more information on the Private College 529 Plan visit www.privatecollege529.com/prepay.