There are
some serious benefits when it comes to pre paid tuition plans and these
are making these types of plans very popular indeed. With the rising cost
of tuition these days pre paid tuition plans are getting more and more
attractive all of the time. This is because when you take part in these
types of programs you are going to be purchasing units of tuition for any
state college or university and you will be paying today’s prices for
them. But here is the good part, these units of tuition will be able to be
used in the future no matter how much the cost of tuition may have risen.
This means that you could pay for 4
years of tuition today and even if the tuition hikes double or triple in
the coming years you still will be getting 4 years tuition. If you planned
well you could have your child’s whole college tuition paid for before he
or she even got to high school.
A 529 plan is popular as well and
these are handy because anyone can contribute to it, no matter where they
live in the country. In some states they may be charged some on the
earnings but not always and only if they live out of state.
The tuition purchased can also be
used for out of state colleges, both public and private but in these types
of situations there could be some more money that needs to be kicked in.
The worth of pre paid tuition can change, especially when you are talking
about private schools and out of state schools.
And if you are going to need to get additional
financial aid for college then different types of plans will affect this
aid differently. For example, 529 plans do not have a giant affect in most
cases on financial aid but pre paid tuition plans do. A prepaid tuition
plan, like a scholarship is a resource which can lead to an actual dollar
for dollar
decrease in the amount of financial aid the
student is eligible for. Savings plans are different they are assets and
only a percentage of them will be taken into consideration when
determining the amount of financial aid the student is eligible for. This
percentage is usually up to 5.6 percent of the total value of the savings
plan itself.
Many states in the US offer pre paid
tuition plans, some schools are even getting into it. This will allow you
to actually purchase tuition for a particular school for your child to
attend when he or she is of age. These same schools are also getting in on
offering their own independent 529 plans as well.
You will never have to worry about
losing the money that you have invested in these types of programs because
even if your child does not go to college you will be able to withdraw the
money, though you will have to pay a penalty on all the earnings, or you
can simply transfer the fund to another
child.
