I had to read this story twice because it sounded too good to be true. Here is the description of what an Independent 529 plan is:
"That's not the case for families who enroll in the Independent 529
prepaid tuition plan. All of the risk for investment returns rests with
the participating colleges, not investors. Families lock in future
tuition or a portion of future tuition, at today's rates, plus an
additional discount that varies from school to school, and the colleges
commit to cover the difference between today's price and future price
and bear the risk for investing the money."
Here are additional details:
"Dickinson last year enhanced its stake in the I-529 plan, guaranteeing
families an annual rate of return on their investment of an
unprecedented 4 percent above the rate of increase in tuition. The
college's previous rate of return was 1 percent above inflation. The 4
percent return above inflation is double the next best rate offered by
any of the 274 colleges and universities participating in the plan.
Each member institution sets its own rate.
Who administers these plans?:
"The Independent 529 Plan is overseen by Tuition Plan Consortium, a
nonprofit collaboration of schools created to establish the only 529
prepaid tuition plan specifically for private colleges and universities
nationwide."
What if student chooses another private school in the program?:
"Moreover, if the student chooses another private college in the plan,
the family will receive the rate offered by that member college at the
time the investment was made―still a significant benefit."
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