Independent 529 Plan Provides New Way to Pay College Tuition

Beginning today, SLU employees and alumni have a new way to save for tuition costs. The University has joined more than 200 other private colleges and universities in becoming members of the new Independent 529 Plan, which allows anyone to pre-pay for future tuition at a discount on today's costs. Best of all, the tuition is guaranteed; there is no risk, even if future tuition rises sharply or investment returns are weak.

A 529 plan is a tax-advantaged way to save for college. "529" refers to the section number in the IRS regulations that describes such plans. For years, families have been allowed to save for college in state plans, and use the funds to pay for tuition. Now you have the ability to pre-pay tuition at SLU or any of the other private member universities. In St. Louis, SLU, Washington University in St. Louis, Maryville University, and Webster University have joined the consortium. To see a complete list of participating colleges and universities, visit the Independent 529 Plan website.

There are no fees associated with the plan and increases in the value of the tuition certificates are tax-exempt. You are not required to choose a college to redeem the certificates until it is time for a student to enroll.

Here's how the plan works: any adult U.S. resident may purchase an Independent 529 Plan certificate for a designated beneficiary. You may begin with as little as $500, or $25 per month with a monthly automatic bank or payroll transfer. You may also purchase as much as $137,500 in this fiscal year. Each participating college and university will also discount its tuition, providing even greater future savings. Again, the certificates are guaranteed to buy future tuition at today's discounted cost. Certificates will buy a different amount of tuition at each member university, depending on the cost of current tuition.

"We see this new plan as part of our ongoing effort to make higher education accessible to more families," said associate provost Ned Harris. "It is an ideal way for families to contribute and pay for a SLU education without worrying about investment risk or tuition inflation."

SLU is taking a leadership role in finding ways to make a private university education more affordable. The Independent 529 Plan will not only help Americans save for college but, over time, will create a larger pool of families who can choose to provide an education at a private college or university.

Any adult may purchase the certificates; parents, grandparents, aunts and uncles, and even friends can open an account.

The Independent 529 Plan will be managed by TIAA-CREF Tuition Financing, Inc. The program will charge no fees to those participating in the plan.

In the near future, SLU will provide the ability for employees to payroll deduct contributions to the plan. Remember, you can use the certificates for tuition at SLU or at any of the other member institutions around the country.

For more information, including questions and answers about the plan, or to sign up, go to the plan website at http://www.independent529plan.org/. You can download an application from the site and mail it in. For additional questions, you may call toll-free 1-888-718-7878.

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