When my son was born last year, it didn’t take too long for the glow of welcoming a new baby to give way to the anxiety of planning for his future, starting with how we’d afford the ever-rising cost of college. Like many parents, I opened a traditional 529 investment account to set him up for success.
But what happens when markets don’t cooperate? As recent volatility shows, even the most conservative strategies are subject to the highs and lows of a turbulent market. When the only certainty is uncertainty, prepaid 529s like Private College 529 Plan offer a safe port in the storm.
What is Private College 529 Plan?
Private College 529 Plan (PC529) is a nationwide prepaid plan owned and operated by a consortium of nearly 300 private colleges and universities. It is designed to help families save confidently for the cost of private higher education by shielding them from tuition inflation. Unlike traditional 529 investment plans, a PC529 account has no market exposure. Instead, your contributions are used to prepay a guaranteed percentage of annual tuition at today’s rates across hundreds of institutions around the country, including Stanford, Princeton, and Notre Dame.
How Private College 529 Plan Works
When you save in a PC529 account, any deposits you make lock in a percentage of a year’s tuition at each member college. Because tuition prices vary, this percentage will be different at each school. At the end of the plan year (July 1 – June 30), deposits are aggregated in a single Tuition Certificate per college, representing the total percentage you have locked in.
Suppose you open an account and contribute $30,000 between July 1, 2024, and June 30, 2025. That $30,000 will have locked in a different percentage of tuition at each participating institution, and your Tuition Certificate could look like this:
| Institution | Annual Tuition | What $30,000 Locks In |
| College A | $40,000 | 75% of a year |
| College B | $50,000 | 60% of a year |
| College C | $60,000 | 50% of a year |
*This is a very limited example. Your contribution locks in tuition at all member colleges.
Member colleges guarantee that you own these percentages no matter how much tuition increases or what happens in the financial markets, even if you never make another deposit.
A Smart Way to Diversify Your College Savings
For many families, it is difficult to choose between a traditional 529 investment plan and a prepaid plan like PC529, but there is a simple solution: why not use both?
A traditional 529 investment plan is a smart way to cover qualified education expenses like room and board, books, and supplies, while Private College 529 Plan lets you prepay and lock in tuition rates to manage future costs better.
Even as 529 investment accounts shift to more conservative options as college nears, your savings still face market risk, whether it’s losing value at the worst time or growing too slowly to keep up with rising tuition. On the contrary, PC529 provides a way to protect your college savings from market risk while keeping pace with tuition inflation.
You can easily fund your PC529 account with a rollover from a state 529 plan, without tax implications, and start redeeming your prepaid tuition after a 36-month hold period. This means you can open an account as late as your child’s senior year of high school to save on the final college tuition bill.
If your child chooses not to attend a member college, you have options. The account owner can change the beneficiary to another child, roll over funds into another 529 plan, or request a direct refund of your total contributions plus net investment returns between 0-2% compounded annually. At minimum, you will get your original contributions back.
Save at Today’s Rates by Acting Before June 30
There will never be a one-size-fits-all approach to saving for college, but families deserve access to tools that offer a level of certainty in volatile times. Now, a little more than a decade removed from my own college graduation, I’m already experiencing extreme sticker shock looking at today’s college tuition prices. By incorporating Private College 529 Plan into my family’s savings strategy, I am turning tuition inflation to my advantage, protecting against rising costs at hundreds of colleges nationwide and adding guaranteed security to my savings.
If you think PC529 is right for you, there is no better time to save! New tuition rates go into effect on July 1, and costs are expected to rise. Instead, open and fund your account by June 30 to lock in the current year’s tuition rates.
Whether your child is still in diapers or touring college campuses, now is the best time to plan for the future by saving with Private College 529 Plan.
About the author:
Connor Swan is the Manager of Partner Success at CollegeWell and Private College 529 Plan. In this role, he builds strong, collaborative relationships with the organization’s nearly 300 participating private colleges and universities to drive engagement with their broader networks in creative and strategic ways. Questions about Private College 529? Reach him at cswan@pc529.com.