More About Independent 529 College Plans
What happens to your Independent 529 College Plan if your son or daughter is not accepted into any of the participating colleges? Fortunately you still have options. You could roll your independent 529 plan over into a state sponsored 529 plan. You could change the beneficiary to another child. Or you could get a refund and still take advantage of the tax breaks if you use the money for other higher education expenses. It is important to note that any withdrawals used for items other than higher education will be taxed. The same options apply if your child gets a scholarship to the school.
The new schools that join the plan will honor the certificates from the current owners. And if a college ever terminates the plan, they will continue to honor the certificates that were sold during and before the time they were involved.
The great thing about independent 529 programs is that you can enroll at anytime and add monies to your account at anytime. You can contribute as little as $25 a month as long as you reach a minimum of $500 in two years. There are no annual fees, entry fees or exit fees. The member colleges pay for the annual management fee so all of your monies go to tuition. And best of all, it is federal tax-free. The rise in value between the original purchase and the amount of tuition that it is redeemed for is tax-free.
If you are thinking of a private college for your child, have a look at the list of participating independent 529 plans. This is one of the best ways save on tuition. Of course an even better way is to get someone else to pay! Check out the details at Free College Money.
