Private College 529 Plan May Be a Smart Choice
What if there were a guaranteed way to lock-in today’s tuition rates at a diverse group of more than 275 private colleges across the country, for up to 30 years?
This could end up being a very significant benefit. According to data compiled by the College Board, the cost of attending a private, nonprofit, four-year college has been escalating rapidly. The 10-year percentage change in inflation-adjusted tuition and fees, from the 2003–2004 academic year to the 2013–2014 academic year, range from a low of 14 percent to a high of 48 percent, depending on the location of the college. The highest difference in cost was for colleges located in the Southwest. Schools located in the West had the lowest difference.
Assume today’s tuition cost at the university of your choice is $35,000. If tuition rises at 5 percent a year, the cost of tuition at that school will be $57,011 in a decade. If you contributed $35,000 to a plan that guaranteed today’s tuition, your tax-free savings at the end of 10 years would be $22,011.
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