The Independent 529 Plan was launched this fall and will offer guaranteed prepaid tuition at participating independent colleges and universities across the country. This is the first 529 plan sponsored by private colleges, although there are many state-sponsored plans in existence. But where state savings plans invest the funds and hope that they grow enough over time to pay for college, funds invested in the Independent 529 Plan offer guaranteed tuition rates at one of the nearly 300 private colleges in the consortium.
The Independent 529 Plan enables a parent or other family member to purchase a certificate for part or all of tuition that can be used at any participating college. They pay today?s prices, less a discount that reduces the cost even further. Years later, they redeem the certificate for the guaranteed amount of tuition, no matter how much colleges are charging at the time the beneficiary begins classes. The certificates have a different value at every member college, depending on the current cost of tuition, the certificate discount rate the college is offering and the amount invested.
"This means that more students will have a chance to attend an independent college, which will give them more flexibility and options in deciding on their education," said Dan Preston, dean of enrollment management and director of financial aid. "Saving for private college is a great challenge for many families. This plan offers a way to help pay the costs of education in the future."
Being a founding member is an advantage for Linfield and identifies the college as one of the schools who helped develop the plan, he added.
"Linfield is pleased to be identified with colleges who are trying to provide a viable way to keep college affordable," he said. "It also provides Linfield with an opportunity to reach families who may not have previously considered Linfield because they believed the costs were too high."
There are no fees to enroll in the plan. Accounts can be opened for as little as $25 provided contributions total at least $500 within two years. Contributions are made on an after-tax basis and any increase in value when a tuition certificate is redeemed at a member college will be free of federal and state taxes. In addition, if the tuition certificates cannot be used by the beneficiary, they can be transferred to a wide range of relatives of the beneficiary or the adjusted value of the certificates can be rolled over into another 529 plan without penalty.
For more information on the Independent 529 Plan, go to http://www.independent529plan.org.