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Prepaid Tuition
Vs. College Savings

The Different Types of 529 Plans


A Variety Of Ways To Pay For College

Planning for the future isn't always easy, but it should be. With lots of programs competing for your dollar, it's important to understand the pros and cons of all the ways you can plan to pay for college.


In general, 529 Plans help families fund future college costs, with tax benefits granted by Section 529 of the IRS Code. There are two types of 529 plans in Illinois—a prepaid tuition plan, as provided by College Illinois!, and college savings plans.


College Illinois! 529 Prepaid Tuition Plan

With a College Illinois! Prepaid Tuition Plan, you purchase semesters of college tuition, allowing you to lock in the cost of college. With a prepaid plan, no matter how high tuition rates climb by the time your child is ready to attend a school in the plan you purchased, tuition and mandatory fees will be covered.


529 College Savings Plans

Other college savings plans involve investing your money in a variety of ways including stocks, bonds, etc. Funds available to pay for the future cost of college will depend on how much you have saved and how well your investments have performed by the time your child is ready to enroll.

Prepaid Tuition Plans vs. Other Savings Plans

Prepaid Tuition Plans vs. Other College Savings Plans

 
Prepaid Tuition
Savings Plan
Key Differences A College Illinois! Prepaid Tuition Plan lets you purchase semesters of college tuition at today's current contract price--without risk of tuition inflation. A college savings plan allows you to choose different investment options with varying levels of risk, with returns that can fluctuate.
Expenses Covered A College Illinois! Prepaid Tuition Plan allows you to pay for in-state or in-district tuition and mandatory fees at all public universities or community colleges in Illinois. Benefits can also be used at most other colleges or universities in the United States. A college savings plan can be applied to any higher education institution and covers all educational expenses, as defined by Section 529, such as tuition, mandatory fees, room and board and textbooks.
Contract Plans & Pricing With a College Illinois! Prepaid Tuition contract there are 3 different plan options to choose from. The payment schedule and pricing are determined by the plan you purchase. A college savings plan only requires a minimum initial contribution when you enroll.
Enrollment Period
General enrollment open November 1, 2016 – May 31, 2017 with newborn enrollment extended through August 31, 2017.

You can enroll in a college savings plan anytime.
Eligibility Any U.S. citizen or legal alien can purchase a College Illinois! Prepaid Tuition contract, however either the purchaser or the beneficiary has to be an Illinois resident. In most states, including Illinois, any U.S. citizen or legal resident can purchase a college savings plan for a beneficiary who is also a U.S. citizen or legal resident.
State Tax Benefits •With a College Illinois! 529 Prepaid Tuition Plan there is an Illinois state income tax deduction of up to $10,000 for an individual and up to $20,000 for married couples in the year the contribution is made.
•Tax-free earnings.
State tax benefits vary with each state's plan.
Federal Tax Benefits •Tax-free earnings.
• Gift and estate tax benefits apply.
All earnings are tax-free when used towards higher education expenses.