September 3, 2003
Belmont Offers Prepaid Tuition Plan, Discounts
NASHVILLE, Sept. 2, 2003 - Belmont University is one of a few Tennessee private universities participating in the Independent 529 Plan, a program designed to help parents of future college students prepay tuition and save money in the process.
More than 220 private colleges and universities throughout the country have agreed to participate in the Independent 529 Plan, which enables purchasers to lock in current tuition rates for future use at any of the participating institutions. Under the Independent 529 Plan, individuals will purchase tuition certificates that can be used for future tuition at any participating institution, assuming academic admission to that institution.
Here’s how it works: Private Colleges A and B are both become members of the Tuition Plan Consortium, and honor tuition certificates purchased under the Independent 529 Plan. College A has a tuition cost of $30,000 for this current year and College B's tuition costs $10,000. A person who makes a $10,000 contribution into the Independent 529 Plan this year would receive tuition certificates that would cover 33.3 percent of College A's tuition for one year, or 100 percent of the tuition at College B, regardless of what tuition costs are the year the certificates are used.
All colleges in the Independent 529 Plan must offer a discount off their current tuition rates, so the certificates will cover slightly more tuition at each school than shown in that example. Institutions participating in the Independent 529 Plan must offer at least a one-half percent discount per year on their current tuition costs.
Individuals can open Independent 529 Plan accounts at no charge and locate member institutions through the Plan's program manager, TIAA-CREF Tuition Financing, Inc., by calling 1-888-718-7878 or through the Internet at www.independent529plan.org.
Other features of the Independent 529 Plan:
A parent, relative or friend at any income level can establish Independent 529 Plan account for a beneficiary (eventual student) and may substitute on a wide range of relatives as the beneficiary if the original beneficiary does not use the certificate.Accounts can be opened for as little as $25 provided contributions total at least $500 within two years. The maximum lifetime contribution limit is equal to five years' worth of tuition at the most expensive participating college in the Plan discounted as if the beneficiary were a newborn.
The discount and tuition rates are established every July 1, to be applied to purchases made within the new program year. Once set, these rates are fixed for tuition certificates purchased during a program year.
The number of participating colleges and universities may increase or decrease over time. Tuition certificates must be honored by institutions that were participating while you held your certificate.
Account owners can contribute up to $11,000 in one year without gift taxes. The maximum contribution for each beneficiary without triggering gift taxes is $55,000 provided contributions are treated as having been made evenly over a five-year period. Joint filers can double that amount.
Contributions are made on an after-tax basis and under current tax law, there are no federal income taxes to the individual when a tuition certificate is redeemed at a participating institution. The sunset provision in the current tax law calls for the tax-free features of this plan to end on December 31, 2010. You should consult a tax advisor for more detailed information.
If a beneficiary can't use the tuition certificates, refunds and rollovers into other 529 plans are available. Refunds result in income tax and other tax penalties.
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Greg Pillon: 615.460.6645
Belmont University
1900 Belmont Boulevard
Nashville, Tennessee 37212
615.460.6000
Belmont University, host of the 2008 Town Hall Presidential Debate, is a fast-growing community of nearly 4,800 students who come from almost every state and more than 25 countries. Committed to being a leader among teaching universities, Belmont brings together the best of liberal arts and professional education in a Christian community of learning and service. Our purpose is to help students explore their passions and develop their talents to meet the world’s needs. With more than 75 areas of study, 12 master’s programs and three doctoral degrees, there is no limit to the ways Belmont University can expand an individual's horizon.
For more information visit www.belmont.edu
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