Guidance Counselors

Saving For College

A college education represents a significant investment in a child’s future. While college costs have risen each year, a number of resources can help families plan well in advance and save money over the long term. Many of these plans are tax free and/or do not charge extra fees.

Savings Plans

Regardless of their eligibility for financial aid, most families will still need funds to pay for any expenses not covered by financial aid, and for any other personal expenses the student may incur. Savings plans are a good way to plan for and cover these expenses, especially as savings and investments held in parents’ names have a smaller impact than student assets on calculations of the family’s expected contribution.

529 Plans

Administered by state and private agencies, 529 plans are interest-bearing accounts designed to allow parents to set aside money for their children’s future college expenses. Withdrawals for qualified college expenses are free from federal income tax, and may be tax-deferred in some states.

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Private College 529 Plan

Owned and operated by 285 private colleges and universities across the country, the Private College 529 Plan allows families to pre-purchase college tuition at today’s prices. The plan protects families from tuition increases (roughly 3-5 percent a year), guaranteed and tax free.

How Does It Work?

  • When the account is opened, the account owner names the beneficiary.
  • Account owners do not have to select a school until the beneficiary is accepted and enrolls. However, during the investment period, account owners may select up to five “sample schools” to find out how much the plan would be worth at each one.
  • When the beneficiary enrolls at a participating college, the 529 certificate is redeemed and the school receives the market value of the investment.
  • The value of the prepaid tuition is guaranteed by participating schools, regardless of what happens in the financial markets. What is paid today will be honored tomorrow.
  • If the student attends a school outside the Private College 529 Plan network, the account owner can name another beneficiary, rolls the assets into another 529 plan or request a refund.
  • Private College 529 assets may be used to pay only for undergraduate tuition and mandatory fees.

Most 529 savings plans are sponsored by individual states and are not guaranteed to keep pace with tuition increases. The Private College 529 Plan is NOT sponsored by a state. Run by its participating schools, it is designed to help keep tuition affordable.

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State Pre-Paid Tuition Plans and State College Savings Plans

Adminstered by various states, prepaid tuition plans allow parents to pre-purchase college tuition based on today's rates. Funds are paid out at the future cost when the student enrolls in college.

Unlike the Private College 529 Plan, account earnings for these plans are based upon the market performance of the investment. These plans are currently available in 13 states. To learn more, please visit

U.S. Treasury Securities

Offered by the federal government, U.S. Treasury securities comprise a variety of notes and bonds that allow a parent to invest and save your money over a fixed amount of time, with minimal risk. Visit for more information.