FAQs | Private College 529
Top 10 Questions about Private College 529 Plan
Q: Do I need to choose a school when I open an account?
No. Tuition certificates may be used at any participating school to which your child is accepted and enrolls.
Q: What happens if my student attends a college outside the network of schools?
The account owner may request a refund or roll over into another 529 plan. The refund or rollover value is the principal adjusted based on the net investment performance of the Program Trust, capped at plus or minus 2% per year. No taxes or penalty are imposed if the refund or rollover value is used for qualified educational expenses.
Q: What if my child enrolls at a school that is no longer a member when I am ready to redeem my tuition certificates?
If the school was a member when you purchased the certificates, those certificates will be honored at the school. The guarantee for certificates is in place for 30 years after purchase, regardless of whether the school is still a member college at the time of redemption.
Q: What if my child enrolls in a school that became a member school after I purchased my certificates?
Your tuition certificates will be honored at that school. The guarantee for certificates is in place for 30 years after purchase, regardless of whether the school was a member college at the time of purchase.
Q: What happens if my child gets a scholarship?
If the beneficiary of your account receives a partial scholarship, you can still use your certificates to cover the remaining tuition costs. If the beneficiary receives a scholarship that covers all or part of the cost of qualified expenses, you can withdraw an amount up to the value of the scholarship without penalty. Earnings that are refunded due to a scholarship are taxable income but are not subject to the 10% additional federal tax on earnings. You can also change the beneficiary to another “member of the family,” within the federal 529 rules.
Q: What is the impact of the Plan on my child’s eligibility for financial aid?
If the parent is the account owner, Private College 529 Plan accounts are treated as assets of the parent, which has a smaller impact on federal financial aid than if the assets were those of the child.
Q: Are there any fees associated with the Plan?
No. There are no entry fees, annual fees, service fees or exit fees –no costs to you beyond the tuition certificate purchase price.
Q: Do I really not have to worry about investment performance or tuition inflation?
You do not have to worry about investment performance or tuition inflation. With the Plan, your tuition benefit is guaranteed by the member schools. As long as certificates are held for at least 36 months, the amount of tuition you purchase will be honored by participating schools for up to 30 years-guaranteed.
Q: What is the smallest amount and the total amount I can contribute?
Contributions can be as little as $25 whether you make your purchases using a regular payment plan, or by contributing whenever you can. However, you must contribute at least $500 within two years.The maximum allowed account value is based on tuition and fees for five years at the most expensive college or university in our network.
Q: What can Private College 529 Plan certificates be used for?
Currently, Private College 529 Plan can be used for undergraduate tuition and mandatory fees.