CollegeWell

A LOOK FOR FINANCIAL ADVISORS

Are your clients saving for college or planning to save? Private College 529 is a simple, prepaid tuition plan that locks in current rates at nearly 300 private colleges and universities nationwide, protecting against tuition inflation. We’re the only 529 prepaid tuition plan owned by its colleges, so there are no state residency requirements to enroll and save.

HOW IT WORKS FOR CLIENTS

QUESTIONS DIRECTLY FROM ADVISORS

We talk to financial advisors across the country. Here are the most common questions they have.

Do my clients choose a specific school to save for when they open an account?

No. By opening an account, your clients lock in the current rate of tuition and fees at each school in the plan and any schools that join in the future. The amount of tuition your clients purchase is based on the current rate of tuition at each participating school, meaning your clients’ contributions lock in a different percentage of tuition at each school.

For example, if Bob contributes $10,000 to his account for his 8-year-old child, that equals a third of a year of tuition at College A where current annual tuition is $30,000, a quarter of a year at College B where current tuition is $40,000, and 20% of a year at College C where it costs $50,000. No matter how much tuition increases at each college, Bob will always own these percentages of tuition.

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 $346,650 for the 2023-2024 Plan Year. The maximum balance may be recalculated or adjusted each year based on the specific Plan Year’s most expensive participating institution.

How can my clients track their savings progress?

Once your client opens a Private College 529 account, they can track their savings by logging into their account. As part of the enrollment process, we ask families to choose up to 10 sample schools to track, which can be changed anytime. Clients can log in to their account to see how much prepaid tuition they own for their sample schools, total contributions (dollar value) in their account and the refund value.*

Additionally, your clients’ account statements report how much prepaid tuition they own to date for each of the sample schools they are tracking.

Are your participating schools required to honor my clients’ prepaid tuition certificates?

Yes. Our participating schools are legally required to accept tuition certificates for up to 30 years from the date of purchase. This includes any schools that may withdraw from participating in Private College 529 Plan. Schools that leave the plan are still obligated to honor tuition certificates purchased any time before the school’s withdrawal for up to 30 years.

What happens if my client’s child doesn’t go to a participating school?

If a client’s child ends up going to a non-participating school or not going to college at all, they have several options:

  • Change the beneficiary to another Qualified Alternative Beneficiary
  • Roll over into a state-sponsored 529 plan
  • Request a refund**

What are the estate planning and gift tax benefits?

Like other 529s, Private College 529 Plan offers significant estate and gift tax benefits.

Parents, grandparents, other relatives or even friends may contribute up to $18,000 ($36,000 for joint filers) per child each year in 2024, or up to $90,000 ($180,000 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 $90,000 ($180,000 for joint filers) in the five-year period, the excess would be a taxable gift in the year of contribution. Learn about all tax benefits.

OUR MEMBER COLLEGES

Nearly 300 unique possibilities for your clients.

Families can choose from hundreds of schools nationwide. City to rural campuses, large to small, liberal arts to science and engineering. Find it all here.

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CLIENTS WHO CAN BENEFIT

CLIENTS WHO CAN BENEFIT

We heard from advisors through qualitative research what clients can benefit most from our prepaid tuition plan. Use these results as a starting point with your own clients.

Large lump sum needs

Clients who want to contribute a large lump sum towards a college education, like parents or grandparents, and take advantage of generous gifting benefits and estate planning benefits while guaranteeing an education for their child or grandchild.

Four years or less away from college***

High school freshmen and older who have a good idea where they want to go and whose parents are just starting to save or want to roll over assets from a 529 investment plan. Our plan provides tuition inflation protection that’s especially valuable to families close to college age. Even juniors and seniors can lock in tuition for the later years of college.

Private college affinity

Clients who have a strong desire to see their children at a specific college like their alma mater or a prestigious private school in their area. Our network of participating schools includes colleges and universities across the country.

Risk averse

Clients who prefer certainty and annuities over potential gains through passive market investing. Our plan offers protection against rising tuition costs with prepaid tuition that’s guaranteed by hundreds of colleges nationwide.

Private College 529 is one of those tools that can be woven into the solution.

As a CFP, I'm always trying to solve for X, which often requires thinking outside the box. Private College 529 is one of those tools that can be woven into the solution. In my opinion, it adds account type diversification to the overall savings plan and adds some inflation protection on the cost of private colleges.

Amy Irvine, CFP®, Rooted Planning Group

Account Profile

MEET GABI AND BILL

Account owners: Since 2003
Beneficiaries: Started to save young with two kids
Savings: $32,000 today and $5,000 to start
Redeemed tuition: A portion of freshman and sophomore year at Pitzer College (CA)

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LEARN MORE ABOUT THE PLAN

LIVE SESSION

June 12 & 19, 3:00 pm ET

Join our next live session to take a look at the plan.

1:1 LOOK

Schedule 30 minutes with our VP Strategic Partnerships to answer your questions.

*Refund value might not be in real-time.

**You may request a full or partial withdrawal of your account. Tuition certificates must be held for 12 months before they are eligible to be withdrawn. The withdrawn value will be based on the amount contributed, adjusted for the net performance of the program trust, subject to a maximum increase of 2% per year, and a maximum loss of 2% per year, compounded annually. The refund amount will be paid from the Program Trust only. As with any 529 plan, if you do not use the money for qualified higher education expenses, any increase in the value of your initial purchase amounts (the difference between your contribution amount and the amount withdrawn) will be subject to federal income tax as well as an additional 10% penalty.

***Tuition certificates must be held for 36 months before redemption.