Get the recipe of your success

FINANCE24.US

Prepaid529 Embrace peace of mind by prepaying tuition for your loved one

Tuition is typically the most expensive component of higher education. For 2016-2017, a year of in-state tuition and mandatory fees at a four-year Virginia public university can cost as much as $21,234.

Tuition Graph
Source: State Council for Higher Education in Virginia (SCHEV) Tuition and Fees Reports for 2009-2010 through 2016-2017

What will tuition cost when your child, grandchild or loved one heads off for freshman year?

With Prepaid529, the uncertainty of tuition inflation is eliminated. Each Prepaid529 semester purchased covers a future semester of in-state tuition and mandatory fees at two- and four-year Virginia public colleges or universities.

1 semester of Prepaid529 =

1 future semester at a Virginia public four-year college or university

2.6077 future semesters at a Virginia public two-year college1

Some choose to buy a single contract of eight or 10 semesters, which covers the four or five years typically required to complete an undergraduate degree.

Others choose to purchase one or a few semesters per enrollment period until accumulating the amount desired.

Pay off your contract in a single payment due on or before May 1, 2017.

Spread out your payments up to the spring of the beneficiary’s high school graduation year.

Lower your monthly payments by making an optional down payment when you open the account.

Enjoy the same tax advantages as with other Virginia529 programs:

  • Deductions for annual contributions, up to $4,000 per account, from Virginia taxable income for the account owner
  • Tax-free earnings
  • Tax-free distributions for qualified higher education expenses
  • Favorable federal gift and estate tax treatment

Tax advantages

To be eligible for a Prepaid529 account:

  • Either the account owner or the beneficiary (child) must be a Virginia resident at the time the account is opened.
  • The beneficiary must be born and in ninth grade or younger during the enrollment period.

Prepaid529 prices are determined by the child’s current age or grade. Use the calculator to explore purchase and payment options.

2016-2017 Prepaid529 Pricing, Coverage & Conversion Rates
Child Age/Grade Price2 VA Public Four-Year University / College Coverage VA Public Two-Year / Community College Coverage 5 Maximum Semesters
Newborn

- Age 4/5

$8,475.00 1 Semester 2.6077 Semesters 10
K - 4th Grade $8,150.00
5th - 9th Grade 3 $7,825.00

Enrollment for Prepaid529 is closed for 2016-2017. Subscribe to Virginia529 news to be informed about the next enrollment period. Payments for accounts opened during 2016-2017 enrollment begin May 1, 2017.

After your child applies to and is accepted at a Virginia public two- or four-year college or university, simply log into your secure Virginia529.com profile and complete a form advising Virginia529 of the school your student is attending. Virginia529 pays the in-state tuition and mandatory fees directly to the school.

At out-of-state or Virginia private institutions:

You may use Prepaid529 benefits at Virginia private colleges or out-of-state colleges, however payouts for eligible educational institutions not in the Virginia public higher education system may not cover the full cost of tuition and mandatory fees.

Virginia public college or university

Full coverage of in-state undergraduate tuition4

Virginia private college or university

Payments + actual rate of return on payments

Out-of-state college or university

Payments + reasonable rate of return on payments

Virginia529 limits an individual beneficiary’s cumulative account balance for all Virginia529 accounts (regardless of program) to $500,000.

Mandatory fees

Mandatory fees do not include laboratory fees, course-specific or optional fees, room and board, transportation, computers or textbooks. Additional charges for a specific course of study, such as nursing or engineering, or for a course load above normal full-time are not covered by Prepaid529.

College admissions

Ownership of a Prepaid529 contract has no bearing on the admissions process at Virginia colleges or those elsewhere. A student must apply to and be accepted by the school he or she wishes to attend.

State obligation

To cover Prepaid529’s contractual obligations in the event of a Virginia529 funding shortfall, Virginia law provides that a sum sufficient appropriation must be included by the Governor in his annual proposed state budget bill. This provision can only be changed through the annual appropriations process, which would require action by the Virginia General Assembly.

Please refer to the Prepaid529 Program Description for a discussion of risk factors associated with Prepaid529.


Category: Savings

Similar articles: