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Facts About Private College 529 Plans

By    |   Saturday, 23 May 2015 11:33 AM

A 529 plan geared toward private colleges is an alternative to many of the state-run 529 plans that focus on state schools. Since they are set up by educational institutions, rather than the government, there are advantages and disadvantages to this.

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The private plans have the same tax advantages as other plans, including both federal and state plans. Furthermore, unlike state-sponsored plans, the Private College 529 Plan does not charge joining, maintenance, or annual fees, according to the American Institute of CPAs.

The caveat of private college plans is committing a child to attending a private school over a state-school. However, there are over 270 private higher-education institutions currently involved in the plan, according to the Private College 529 Plan website.

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It is important to also consider that private universities generally have higher tuition, since they do not have different rates for in-state and out-of-state students. The private plan is also alluring to many due to the prestige of some of the member schools, such as Stanford, Duke, and Princeton, the New York Times reported.

Many considering the plan also have concerns about predicting which college their children may go to. If the child decides to attend a state school or non-member private university, there are options to obtain the invested money.

As the American Institute of CPAs said, the account holder can get a refund – where there is either a two percent maximum gain or even a loss. They can also change the beneficiary of the plan to a different family member, or change the account to a state-sponsored 529 plan.

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A 529 plan geared toward private colleges is an alternative to many of the state-run 529 plans that focus on state schools.
Private, college, 529 plan, retirement
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2015-33-23
Saturday, 23 May 2015 11:33 AM
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