The Advantages of Independent 529 Plan

Independent 529 Plan offers families like yours the advantage you need to make your child's private college education affordable:

• affordable—future tuition at less than today's price
• flexible—hundreds of colleges, with options for students who do not go to a member school
• low-cost—no entry fees, no annual fees, no exit fees
• all federal tax-free
• significant estate and gift tax benefits
• high contribution limits
• no special eligibility requirements, no income limits for participation
• enroll at any time, add to your account at any time

The Affordability of a College Savings Program, with Future Tuition at Less than Today's Price—Because Independent 529 Plan is a prepaid tuition program, not an investment account, it allows you to save money for college tuition by locking in the current tuition prices at the time of purchase, and by offering a discount on tuition overall.

Tuition certificates are guaranteed by the member colleges to retain their value no matter how much tuition rises or what happens in the investment markets. By prepaying tuition now, you’re buying at today’s rates and avoiding years of tuition inflation. Plus, because each member college offers a special “tuition discount,” you’re actually buying future tuition at less than today’s price.

Flexibility to Choose from Some of the Nation’s Top Schools—Unlike many state pre-paid plans, which only apply to in-state, public universities, Independent 529 Plan can be used at over 270 colleges. Some of the finest private colleges and universities across the nation are already participating in Independent 529 Plan, offering a wide variety of choices to fit the talents and interests of every student. New member institutions are signing up all the time, giving your future student even more choices.

New schools joining Independent 529 Plan will retroactively honor certificates from all current holders. If a school should ever withdraw from the plan, it would continue to honor all certificates generated during and prior to the time of its participation.

If your child gets a scholarship or does not attend a member college or university, you can change the beneficiary, roll the savings over into another 529 account or get a refund and keep the tax advantages if you use the money for higher education.

Enroll at Anytime, Add to Your Account at Any Time— Because every family's needs are different, Independent 529 Plan offers a number of ways to participate—from prepaying the full cost of several years to paying a set amount each month. The more and earlier you prepay, the greater the percentage of tuition you can lock in at less than today's price. However, you can also start small by contributing as little as $25 a month as long as a minimum of $500 is accumulated within two years.

No Entry Fees, No Annual Fees, No Exit Fees—All costs of administering the program, managing the assets, and running the Tuition Plan Consortium office are paid for by an annual management fee, which is picked up by the member colleges. That means that you pay no fees, and your entire contribution is applied directly to tuition.

With average annual tuition increases of 6% and fees for 529 savings plans in the 1% per year range, those customers would have to earn an approximate 7% return to equal the value of Independent 529 Plan. And that doesn't take into account the additional savings realized by the certificate discount. For a family using investment vehicles outside of a 529 plan tax-free bubble, the equivalent return would have to be well into the double digits to match the value of Independent 529 Plan.

All Federal Tax-Free—The increase in value between the amount of original purchase and the amount of tuition for which the certificate is redeemed is federal tax-free. Certificates are in the name of the child—not a college—and can be applied at any participating institution, including colleges and universities that join after the certificate was originally purchased. Independent 529 Plan is also tax-free in most states; check with your local tax advisor.

Significant Estate and Gift Tax Benefits—Independent 529 Plan offers you significant estate and gift tax benefits that reduce the taxable value of your estate. Contributions to Independent 529 Plan are completed gifts and qualify for the $13,000 annual gift tax exclusion. This reduces the taxable value of your estate, while you retain complete control of the account. If you are married, your spouse may elect to split the gifts made to purchase a tuition certificate for a beneficiary, thereby doubling the amount of the annual gift tax exclusion—from $13,000 to $26,000.

Like all 529 Plans, Independent 529 Plan enjoys the benefit of a federal 5 year-averaging provision. You can elect to treat up to $65,000 ($130,000 if married and filing jointly) as having been made in 5 equal gifts over a 5-year period. If you contribute more than $65,000 in one year, the excess would be a taxable gift in the year of contribution.

High Contribution Limits— Overall contribution limits to Independent 529 Plan are designed to cover the tuition and fees for five years at the most expensive college or university in the plan (which is $190,000 for the 2009-2010 school year).

No Special Eligibility Requirements, No Income Limits for Participation—There are no special eligibility requirements to take advantage of Independent 529 Plan. And there are no income limits for participation. If you are an adult U.S. resident who wants to help fund a private college education for children, grandchildren or any loved one, you are eligible. In addition to opening an account for a named beneficiary, you can open an account in the name of a trust or estate. Qualified organizations can also open accounts for scholarships for unnamed beneficiaries

If you take a refund, rather than redeem your certificate for its intended purpose, the refund will be adjusted based on the net performance of the Program Trust, subject to a maximum return of 2% per year and a maximum loss of 2% per year.