Prepaid tuition an option for the future
By Kristi Walker
Staff Reporter

Parents can now be thinking about their children’s future education earlier than usual because of a plan that will allow them to prepay college tuition.

TCU became part of the Independent 529 Plan with more than 200 private universities nationwide this fall.
The plan allows parents to ensure future tuition at less than today’s prices, according to the program’s Web site (www.independent529plan.org).

Certificates for full or partial tuition are purchased based upon the current tuition of a chosen university. Each university is required to discount prepaid tuition by a minimum of 0.5 percent. TCU offers a 1 percent discount, said Director of Communications Tracy Syler-Doctson. There is a worksheet on the Web site to help parents with their decisions, she said.

“Purchasing a year or more of tuition enhances your financial advantage because the tuition is paid at below-current levels, and the certificate discount compounds for the entire time you hold the certificate,” according to the site.

The 529 Plan allows the purchased certificates to be used at any participating university, including Vanderbilt University, Southern Methodist University and Tulane University. However, should the beneficiary not be accepted or choose not to attend affiliated colleges, the contributor receives a refund to be used at a non-affiliated university within one year before it is subject to taxes, Syler-Doctson said.

The program also allows certificates to be transferred to a wide range of relatives or rolled over to a separate plan, according to the 529 Plan Web site.

Michael Scott, director of Scholarships and Financial Aid, said, “The plan allows a risk-free return rate on an investment, which outweighs what you would get from mutual funds.”

Allana Patterson, lead counselor at Paschal High School, said that although the plan sounds good, she does not think it will be beneficial to helping more students attend college.

“Those who cannot afford to go to college, also cannot afford to prepay for college. They live on a paycheck by paycheck basis,” Patterson said. “We just have to make sure that we get more students to meet the qualifications and fill out the forms to get financial aid.”

Scott said that although the plan is not necessarily the best investment for every family, anything that helps a family to plan ahead is beneficial.