SPRINGFIELD, Ill.— Parents and grandparents often believe that the best gifts for their children are the ones they yearn for the most, but what happens in a couple of years when that Nintendo Wii or Zhu Zhu Hamster is obsolete? Fortunately, there are things to give that will last longer than the latest toy. A gift of a college education lasts a lifetime, and a College Illinois!® 529 Prepaid Tuition Program contract makes it affordable to give.
A College Illinois! 529 Prepaid Tuition Program contract between the purchaser and the State of Illinois ensures tuition and fee benefits for college, regardless of fluctuations in the market. When a beneficiary is ready to go to college, he or she can choose to attend almost anywhere because benefits can be used at Illinois public universities and community colleges or applied at public and private institutions nationwide.
Unlike a college savings plan, the College Illinois! 529 Prepaid Tuition Program is a tax-advantaged plan that protects families from tuition inflation by allowing purchasers to lock-in a price now to cover future tuition and fees and apply benefits at colleges nationwide. A child born today is projected to incur college costs of more than $180,000 at a four-year, public university, but parents and grandparents can sign a prepaid tuition contract today for much less, negating the effect of tuition inflation on their pocketbooks by keeping pace with the increases in tuition and fees equal to those found at in-state, public institutions. Parents and grandparents can purchase as little as one semester at a community college to nine semesters at a public university. Various payment options are available, including monthly and annual installments.
According to the American Association of Retired People (AARP), many financial experts agree that state-sponsored 529 plans are the best way to pay for a college education. “Authorized by Congress in 1996, these accounts are fully tax free when used for college expenses,” and the state of Illinois allows its own tax deductions.
Nationally-acclaimed CPA/CFP Ginita Wall writes on the Women’s Institute for Financial Education Web site, wife.org, “Unlike custodial accounts, these plans do not affect qualifications for financial aid... Money in these plans can be used for college in any state, and can be transferred among children in the same family. Also, in some states, contributions to these plans are tax-deductible, with tax-free withdrawals as well. You just can't beat that!”
How do you give a financial gift like a college education? ISAC Executive Director Andrew Davis has several ideas:
“Combine prepaid tuition with another gift that will help the child gain a better understanding of money. A piggy bank to help a young child learn about saving is good for pre-kindergartners. A children’s book such as Rock, Brock, And the Savings Shock or The Penny Pot would be appropriate gifts for young readers. For older children, Hollis Page Harman’s Money Sense for Kids might be a good choice,” he said.
Now is the time for parents and grandparents to purchase this secure option for their child’s educational future at the lowest prices. Visit www.529prepaidtuition.org or call toll-free at (877) 877-3724 for program information, monthly pricing discounts and enrollment guidelines. December 31, 2009 is the final day to apply plan payments for 2009 taxes!
Administered by the Illinois Student Assistance Commission, the College Illinois! 529 Prepaid Tuition Program is a secure college funding option because benefits do not fluctuate with the stock market. Since the program’s inception in 1998, more than 66,000 prepaid tuition contracts with a value of more than $1.6 billion have been purchased. The program’s Trust Fund is managed by professional money managers, subject to oversight by the program’s Investment Advisory Panel and the Illinois Student Assistance Commission.
More about College Illinois! 529 Prepaid Tuition Pricing and Plans
A tiered pricing system called SmartChoice, introduced in 2008, makes plans even more affordable than ever before. SmartChoice pricing provides three distinct price and benefit levels (Community College, University and University+) with different payment options. The plans are completely flexible and let the purchaser choose a pricing option that best matches financial needs and realities. Combination plans including four semesters at a community college and four semesters at a university level are also available. Various payment options include monthly and annual installments and multiple down payment levels. In addition, program beneficiaries can choose to attend college anywhere because benefits can be used outside of the state at public and private institutions nationwide.
Upon purchasing a contract, Illinois taxpayers can annually deduct up to $10,000 per individual or $20,000 for married couples filing jointly, and all plan earnings are exempt from state and federal taxes. Neither ISAC nor the College Illinois! 529 Prepaid Tuition Program can provide legal or tax advice. Please consult a professional tax advisor concerning federal and state tax implications or purchasing any contract.
To enroll in the College Illinois! 529 Prepaid Tuition Program, visit www.529prepaidtuition.org, or call (877) 877-3724 for program information, materials and enrollment guidelines.
About the College Illinois! 529 Prepaid Tuition Program and the Illinois Student Assistance Commission:
The Illinois Student Assistance Commission provides students of all ages and backgrounds with the resources and support to obtain financial aid for higher education. A state agency, ISAC has paved the path to post-secondary education with innovative programs for more than 50 years. Last year alone, ISAC continued its mission to make college accessible and affordable for Illinois students by issuing over 186,000 grants and scholarships totaling nearly $431 million.
The Commission provides educational funding with student loans, as a loan guarantor and via numerous public programs such as the Monetary Award Program (MAP), the Illinois Veteran Grant and the College Illinois!® 529 Prepaid Tuition Program. Students and families have free access to a wealth of financial aid and college planning information at ISAC’s family of websites available at www.knowhow2GOIllinois.org and www.529prepaidtuition.org.