Free College Money

Let’s explore the independent 529-college plan. Basically it is a program designed to avoid the rampant inflation of college tuition. With this plan you can actually lock in the current price of today’s tuition that your child can later use at any member college.

Here’s how the independent 529-college plan can work for your family. Say that you purchase half a year of tuition for your child today. The member colleges carry the risk and you are protected from future tuition increases. The tuition rate that you just paid is absolutely locked in no matter how much the tuition rises. So you invest $5,000 this year for your son who is due to start college in 15 years from now. If he attends a college that’s an independent 529 member, the plan will look up what the college was charging the year that you made your deposit. Say that it was $20,000; you have credit for 25% of one year’s tuition no matter what the school is charging in 2022. By prepaying, you’ve just saved $20,000 tax-free. You may be paying in excess of 50% less tuition than someone who is not participating in the independent 529-college plan.

This only works if your child goes to a college that is a member of the plan. The amount you save is in relationship to the amount you prepay, but even a small payment can go a long ways towards saving on college. It’s important to note that the independent 529 money only covers undergraduate tuition and mandatory fees. There’s no provision for the room, board, books or supplies like the other 529 plans do. This may or may not be changed by the time your child attends college.

Each member college also offers a special tuition discount so you’re not only saving on tomorrow’s rates, but you’re actually getting a better deal than today’s prices. Each college sets their own discount rates. There are over 260 colleges participating in the independent 529 plan today. Take a look, some of the finest colleges and universities are among the participants.