Colleges Use the 529 Plan to Recruit Students
It pays to save.
That was always the case with the 529 plan, a savings plan for college that was tax deductible.
And now the colleges are on-board too—using the 529 savings plan as a recruiting tool.
According to the Wall Street Journal, hundreds of colleges, including Stanford and Duke University are offering tuition discounts, prepaid plans with extra incentives and even scholarships for families that put money aside for college in 529 plans.
“The 529 plans are available in nearly every state and are named for the section of the Internal Revenue Code under which they were created. One perk associated with 529 plans is a tuition-rewards program from SAGE Scholars, an education finance company, that is available to participants in the Pennsylvania and Wisconsin 529 plans. Similar to a frequent-flier program, reward points are tallied quarterly at 1.25% of the total account value. Each point — which can come from select CDs, annuities and 401(k)s in addition to 529s — equals a dollar toward tuition at 213 member schools. Families can rack up as much as a full year’s tuition, if spread over four years.”
The average discount for students entering in fall 2007 was $6,192, or $1,548 a year. Participating schools range from Drexel University in Philadelphia to lesser-known institutions such as Augustana College in South Dakota, and 10 more schools joined in the past 12 weeks.
By signing up, colleges gain access (with account-holders’ permission) to the mailing addresses of 115,266 high school students mulling their higher-education options. SAGE Scholars says it is in talks with three other states about offering rewards to their 529 account-holders.
So looks like the 529 plan is a good investment for higher education.
Just don’t forget, a 529 plan doesn’t guarantee admission. Just good rates if you get in.
This entry was posted on Thursday, July 3rd, 2008 at 11:02 am and is filed under Education Savings Plans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
July 4th, 2008 at 7:12 am
I think this is a wonderful idea. 529 plans remain one of the best ways to save for college.
-Andrew