CollegeWell

For Financial Advisors

the ace up your sleeve

People are often surprised when they learn about Private College 529 Plan. It’s so much more than a simple, low-risk way to save for college. It’s a solution that opens up even more possibilities for you and your clients.

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Private College 529 Plan offers guaranteed prepaid tuition without the risk of market volatility that comes with traditional investments. Add our growing network of nearly 300 private colleges across the country — and the plan sells itself. 

With our Private College 529 Plan, you have a new solution in your toolkit that can be used for:  

  • Legacy and estate planning  
  • Combining with traditional 529 savings plans 
  • Tax-advantaged savings 
  • Retaining and expanding existing client accounts  
  • Adding balance or diversifying portfolios  

A plan for your clients. A value-add for you.

We know debt can be a real burden — especially for young adults starting out and parents nearing retirement age. Your clients can lighten the load with prepaid dollars for college as opposed to interest and loans. 

There’s a lot for your clients. Now let’s talk about you.

You get to hear from our experts who walk the walk. They know college finances because they work in financial aid offices in colleges large and small. Receive quick takes that fit into your busy day. And let this unique opportunity help broaden your knowledge and boost your skills. 

Speaking of skills — we also partner directly with financial advisors to help families. Together with your expertise, we break down big financial topics relevant to parents saving for (and stressing about) college.

Check out our financial advisor resources >>

5 reasons to save with Private College 529 Plan

1. It’s guaranteed

Your clients’ tuition is guaranteed by our member colleges and universities, not state governments. Our members take on all the risks and fees.

2. It’s protected 

Tuition increases? Not with our plan. Clients purchase future tuition at current prices. This protects them from both tuition increases and market volatility.

3. It’s tax-advantaged and so much more

  • Account value increases as tuition rises over the years and that increase in value will be taxdeferred. 
  • Some states offer tax deductions or credits, similar to other 529 plans.
  • There are no income restrictions, and account size limits are generous — up to five years of tuition at the plan’s most expensive school (current maximum is $317,030).

4. It’s flexible

In network or out of network, our plan is flexible. Pay any qualified expense at any institution, private or public. While our tuition guarantee only applies to member colleges, your clients’ contributions are still redeemable outside the network.

5. It’s future-minded

Our plan is great for estate planning. Contributions to the plan are considered completed gifts and qualify for annual gift tax exemptions. Contribute up to five times the annual gift exclusion amount in a lump sum (currently $80,000 for single filers and $160,000 for joint filers) — a unique perk of 529 plans. 

Plus, contributions to 529 plans by the account owner are excluded from that account owner’s estate when taxes are assessed, even though the owner retains complete control of the account.*

*If the account owner dies before the end of the five-year period, a prorated amount will be added back into the estate. 529 plans are an attractive option for grandparents who seek tax advantages in estate planning. Consult your tax advisor for information specific to your situation. 

Questions?

Contact Jonathan Sparling at Jonathan@PC529.com. 

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FAQs

Since tuition and fees are different at every college, what do my clients' contributions buy?

Every dollar your client contributes purchases Tuition Certificates that can be redeemed to pay for future tuition at any of our participating schools. The amount of tuition you purchase is based on the current rate of tuition at each participating school. The percentage of a year purchased will vary by school, based on the tuition rates for the academic year in which your certificates are purchased. For example, if Nancy contributes $10,000 to her account for 8-year-old Ben, that equals a third of a year of tuition at College A where current annual tuition is $30,000, and a quarter of a year at College B where current annual tuition is $40,000. No matter how much tuition increases at Colleges A and B, Nancy will always own these percentages of tuition (33.33% at College A and 25% at College B).

Can my clients use their Tuition Certificates for colleges that join the plan after their purchase?

Yes. Schools that sign up to participate are required to honor Tuition Certificates that were purchased before the school signed on based on the tuition rate charged by that school for the academic year during which the Tuition Certificate was purchased. Participating schools guarantee Tuition Certificates for 30 years from the time of purchase, regardless of whether the school was a participating college at the time the Tuition Certificate was purchased.

How much can my clients contribute to their Private College 529 accounts?

Our maximum contribution limits are generous and change annually. The amount is equal to the cost of five years of full-time tuition at the most expensive participating college, which is currently $317,030 for the PC529 2021-2022 Plan Year. The maximum balance may be recalculated or adjusted each year based on the specific Plan Year’s most expensive participating institution.

Are contributions to my clients' Private College 529 accounts tax deductible?

No. Contributions to 529 accounts (both state-run and Private College 529) for federal income tax purposes are made on an after-tax basis (e.g., similar to Roth IRA contributions). There is no federal tax deduction for contributions to a 529 account. However, earnings or gain in their account grow federal tax-deferred and if the earnings in the account are used to pay for qualified higher education expenses (e.g., tuition, fees, room and board, books and supplies) the gains and earnings are never taxed. Gains or earnings that are withdrawn to pay for non-qualified education expenses (expenses that are not tuition, fees, room and board, books and supplies, etc.) are subject to federal income taxes and a 10% penalty. Many states do offer state income tax deductions or credits for contributions to 529 accounts. Often the benefits apply only to that state’s 529 plans. However, if your client lives in Arizona, Arkansas, Kansas, Minnesota, Missouri, Montana or Pennsylvania, they may be eligible to claim a state income tax deduction or credit for contributions to any 529 plan, including Private College 529. Your clients should consult their tax and legal advisors for information specific to their situation.

Are there any estate planning and gift tax benefits?

Like other 529 plans, Private College 529 Plan offers your clients significant estate and gift tax benefits. Parents, grandparents, other relatives or even friends may contribute up to $16,000 ($32,000 for joint filers) per child each year, or up to $80,000 ($160,000 for joint filers) prorated over a five-year gift deferral period, to an account. This gift can be made without incurring a federal gift tax. If the contribution exceeds more than $80,000 ($160,000 for joint filers) in the five-year period, the excess would be a taxable gift in the year of contribution. Contributions to 529 plans by the account owner are excluded from that account owner’s estate when taxes are assessed, even though the owner retains complete control of the account. If the account owner dies before the end of a five-year gift deferral period, a prorated amount will be added back into the estate. 529 plans are an attractive option for grandparents who seek tax advantages in estate planning. Your clients should consult their tax and legal advisors for information specific to their situation.

Act now. Lock in this year's tuition rates before July 1st — and save.