Many Boston families consider private college options for their children. They start thinking that way even when their children are toddlers. Nothing like the terrible two’s to help a mom look forward to the college days!
Here are three truths to consider if you worry private college is out of reach:
- Don’t focus on sticker prices. Private schools give generous aid packages. The average private school student paid tuition of $14,000 in 2016-17, after discounting, according the College Board’s latest statistics.
- Consider graduation rates. Nearly 80 percent of private college students graduate in four years, compared with only half for publics, according to the U.S. Department of Education. That means less tuition and a faster paycheck.
- Nearly 300 private colleges and universities help you cut your cost. They are members of Private College 529 Plan, a consortium of schools that enables families to prepay today’s prices for tomorrow’s education. Participating schools guarantee the tuition no matter what happens with investment markets or how much tuition increases in the coming years. The plan charges no fees, so every dollar contributed goes directly to your child’s tuition.
“Where can we use this plan”? you ask. Massachusetts is chock full of member colleges – 13 in all, from Amherst to Wheaton with BU, MIT, and Wellesley among those in between. But the Plan is just as useful outside the Commonwealth. The nationwide reach runs from Princeton to Duke, to Notre Dame to Stanford and more.
Private College 529 can help you potentially save thousands on the cost of college. Here’s a hypothetical example of how it works.
- Assume annual tuition at College A is $45,000 now.
- You open a Private College 529 account for your 8-year-old child with $22,500 – prepaying the equivalent of half a year.
- If College A’s tuition increases 4% a year for 10 years, the half year cost of tuition would be $34,627 when the child arrives on campus.
- Your tax-free tuition savings would be $12,127.
Remember, you are not locking in a particular school – your prepaid tuition is honored at all of the Plan’s current and future participating schools.
Like more information about saving and paying for college? I recently hosted a webinar, and you can view a recording here.
Nancy Farmer is President of Private College 529 Plan, a consortium of nearly 300 private colleges and universities. She has been helping families save for college for nearly two decades. Email her at firstname.lastname@example.org.
Private College 529 Plan is sponsored by Tuition Plan Consortium, LLC. OFI Private Investments Inc., a subsidiary of OppenheimerFunds, Inc., is the program manager. Participation in the Plan does not guarantee admission to any college or university, nor does it affect the admissions process.
Purchasers should consider the risks associated with purchases and refunds of Tuition Certificates. The Disclosure Statement contains this and other information about the Plan, and may be obtained by visiting privatecollege529.com or calling 1.888.718.7878. Purchasers should read these documents before purchasing a Tuition Certificate. Tuition Certificates are not insured or guaranteed by the FDIC, TPC, any governmental agency or OFI Private Investments Inc. or its affiliates.