The new prepaid college tuition plan, customized specifically for private colleges, allows individuals to purchase a “piece” of a private college’s tuition at today’s prices that will be accepted as payment when the student eventually attends private college. In that respect, the new plan diverges from traditional 529 college savings programs in which people invest contributions for later use when college is attended.
Private colleges throughout the United States that elect to participate in the program will then honor the tuition certificates offered by the plan. “During the next few months, we will get formal re-affirmation from a list of several hundred private colleges regarding their participation as an Independent 529 Plan school,” said Doug Brown, president of Tuition Plan Consortium (TPC), the non-profit group that will run the program.
TPC is targeting the start of the plan for this summer when people will be able to purchase tuition certificates. The new place will be administered by TIAA-CREF Tuition Financing, Inc, with asset management handled by TIAA-CREF Trust Company, FSB.