SPRINGFIELD, Ill.— Parents and grandparents often believe that the best gifts for their children are the ones they long for the most, but what happens in a few years when those Pillow Pets are obsolete? The gift of a college education lasts a lifetime, and a College Illinois!® Prepaid Tuition Program contract makes it affordable to give to a loved one today. In fact, contributions to a College Illinois Prepaid Tuition plan before December 31 can quality for 2010 tax benefits.
Administered by the Illinois Student Assistance Commission (ISAC), the College Illinois! Prepaid Tuition Program is a state-sponsored plan that allows purchasers to lock in the cost of tuition. When a beneficiary is ready to go to college, he or she can choose to attend almost anywhere because benefits can be used at all Illinois public universities and community colleges or applied at most public and private institutions nationwide according to the terms of the contract.
According to the College Board, today’s newborn is expected to pay $180,000 to attend a four-year, public university. By purchasing a prepaid tuition contract for a future student, parents or grandparents lock in a price for their college education today, staying a step ahead of tuition inflation.
Eric McKissack, chief executive officer of Channing Capital Management in Chicago, said the key to investing in education is to start early and use tax-advantaged vehicles like 529 plans that are tax deductible and grow tax free.
“With costs soaring the way they are, everyone should make saving for college a priority today,” he said.
The College Illinois! Prepaid Tuition Program offers many flexible plans that give parents and grandparents the opportunity to purchase as little as one semester at a community college or as many as nine semesters at a public university. Various payment options are available, including monthly and annual installments.
“The price of college for one child is steep, and we have five to worry about,” said Cindy Wisniewski of Naperville, Ill., a College Illinois! Prepaid Tuition Program contract holder. “College Illinois! lets us save for college for our kids over time in a way that makes sense financially for us.”
A college education is a gift that will never go out of style, and because College Illinois! is an IRS-designated 529 program, plan earnings are exempt from state and federal taxes when used for qualified education expenses. Contributions made towards a contract before December 31 can be claimed on 2010 state tax returns. Illinois taxpayers can deduct contributions up to $10,000 per individual or $20,000 for married couples filing jointly. For those who purchase a plan as a holiday gift for their child or grandchild, there is a gift-giving tax exemption of up to $13,000 for individuals or $26,000 per couple.
When giving a financial gift such as a College Illinois! contract to a child, ISAC Executive Director Andrew Davis suggests combining it with another gift to help give the recipient a better understanding of money.
“A piggy bank is an appropriate gift for a young College Illinois! recipient, while older children might appreciate a book like Money Sense for Kids,” said Davis, who is also a contract holder.
Now is the perfect time for parents and grandparents to purchase this secure option for their child’s educational future. Visit www.529prepaidtuition.org/gift or call toll-free at (877) 877-3724 for program information, monthly pricing discounts and enrollment guidelines.
Administered by the Illinois Student Assistance Commission, the College Illinois! 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 68,000 prepaid tuition contracts with a value of more than $1.6 billion have been purchased. ISAC’s commissioners are responsible for the overall management of the program and its investments, including hiring a qualified slate of investment managers and other professionals.