Private College 529

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FAQs


Plan Basics
Member Considerations
Family Considerations
Alumni Office Considerations
Marketing Considerations

PLAN BASICS [back to top]

What is Tuition Plan Consortium?

Tuition Plan Consortium, LLC (TPC), a national group of private colleges and universities, sponsors Private College 529 Plan. TPC was created for the sole purpose of offering a prepaid 529 option to keep tuition at private colleges and universities within reach of American families.

Who runs TPC?

A volunteer board of up to 21 directors oversees TPC's activities through its full-time staff. Anyone who meets the requirement of TPC's confict of interest policy may serve as a director, however at least 75% of the board must consist of representatives from participating schools.

What is Private College 529 Plan?

Private College 529 Plan (the Plan) is the only nationally sponsored plan that's owned by participating private schools and built to help families control the cost of tuition and attempt to avoid market risk. By participating in Private College 529 Plan and joining Tuition Plan Consortium (TPC) colleges take a national leadership position in maintaining access and affordability to private higher education, providing a service for alumni and promoting a culture of saving for education.

For families, the Plan delivers significant savings on the cost of a private college education. Families can purchase tomorrow's tuition at today's prices for any school in our national network of colleges and universities—without having to choose a specific college until the beneficiary is ready to enroll.

How does a family benefit from the Plan?

Joining Private College 529 Plan allows families to:

Who manages the program for TPC?

Private College 529 Plan is managed by OFI Private Investments Inc., a subsidiary of OppenheimerFunds, Inc. OppenheimerFunds, Inc. is one of the nation's largest and most respected investment management companies. The products and services of OppenheimerFunds, Inc. and its subsidiaries include mutual funds, qualified retirement plans for individuals and corporations, 529 college savings plans, institutional investment management and sub-advisory services.

Who manages the program's investments?

The TPC Board of Directors and its appointed investment committee has authorized OFI Trust Company to serve as trustee of the program's qualified trust. The TPC Board sets the investment policy and objectives and a committee of the board adopts the asset allocation and oversees the investments.

How does the college get paid?

Tuition certificate redemption is easy for both schools and families. Participating colleges can expect to receive a payment in less than a week from the time the program manager receives a redemption request.

Step 1: Account owner completes the redemption form or calls the program manager OFI Private Investments Inc.

Step 2: Program manager verifies eligibility and emails a redemption notification to a designated official at your school.

Step 3: Program manager sends check to the attention of the same designated official.

Step 4: Program manager sends a confirmation notice to account owner (without disclosing amount received by school).

Step 5: Program manager reports certificate value to account owner and IRS via Form 1099Q in January. No IRS reporting is required by the school, even if a refund occurs.

What is the tax status of the TPC program?

Private College 529 Plan is designed to comply with Section 529 of the Internal Revenue Code. The Plan has all the federal income tax benefits provided under Section 529 as state-sponsored tuition savings and prepaid tuition plans. In addition, income from redemption of tuition certificates does not constitute unrelated business income taxable to your school, according to the IRS.


MEMBER CONSIDERATIONS [back to top]

How does a college or university benefit from the Plan?

  • Participation signals to the public, media and policy makers that you are doing something tangible to help families mange the cost of higher education
  • Your school gains access to thousands of financially prepared students today and for years to come
  • By encouraging families to prepay, the Plan helps add tuition dollars to your school's operating budget while relieving pressure on financial aid funding
  • Joining the Plan shows alumni that you are serious about helping graduates provide the same high quality private college education to their children

How much does a school receive from a tuition certificate?

The payment to a participating school will be equal to the tuition certificate purchase price and the net investment earnings for the period the payments were invested in the qualified trust. Learn more about how much schools can receive.

How much can an account owner redeem at any one time?

Only one academic year of tuition and mandatory fees can be redeemed by an account owner at a time. Depending on the value of a tuition certificate and a participating schools tuition rate, an individual tuition certificate may cover a fraction of a year to several years of tuition and mandatory fees. Please note that tuition certificates are not identified with a specific school until the time of enrollment.

What is the projected investment return on tuition certificate funds that are placed into the qualified trust?

TPC can make no guarantees regarding future investment returns. However, the investment goal of Tuition Plan Consortium LLC (TPC) is to provide a return to participating schools approximately equal to the value of tuition provided to the beneficiaries.

How does a college or university become a member of TPC and a participant in Private College 529 Plan?

1. Review and complete TPC agreements and forms.

As with any legal decision, we encourage schools to consult legal counsel before signing any documents.

2. Complete the tuition history and mandatory fee form provided by TPC.

 

What happens when a school joins TPC?

New member schools may immediately receive payments from redeemed tuition certificates that were purchased prior to the school joining the Plan, provided the beneficiary is admitted.

What happens if a participating school decides to withdraw from TPC?

If a school withdraws, it would continue to be obligated to honor only Plan tuition certificates purchased up to the end of the program year in which the school withdraws.

Could a member institution be expelled from TPC?

Yes. A member school may be expelled if:

  • The school ceases to be a non-profit educational organization under IRS Code 529(e)(5)
  • The school breaches any provisions within the TPC agreements
  • Two-thirds of the Board of Directors votes to expel
  • Two-thirds of participating schools vote to expel

Are participating schools exposed to general liabilities by actions of TPC or other consortium participants?

No. The Limited Liability Company structure and the provisions of the Consortium Agreement are intended to shield participating institutions from any general liabilities as described under the laws of the State of Delaware. As with any legal decision, we encourage schools to consult legal counsel before signing any documents.


FAMILY CONSIDERATIONS [back to top]

How does a family benefit from the Plan?

Families save on the cost of tuition and protect themselves against market risk. They receive guaranteed protection against future tuition increases, income tax exemption on any increase in value of certificates when they are used for tuition and mandatory fees, and the flexibility to redeem certificates at any of the Plan's more than 270 participating colleges and universities.

What is the minimum purchase amount?

An account owner can set up an automatic purchase plan and make purchases on behalf of any beneficiary for as little as $25 per month. A minimum of $500 in purchases must be made to an account within two years or TPC will return the funds to the account owner.

What is the maximum purchase amount?

For the 2010-2011 program year, the maximum lifetime contribution limit is $215,950.00. This amount covers the cost of tuition and mandatory fees for five years at the highest priced participating institution in the Plan today.

What educational expenses are covered?

The plan covers undergraduate tuition and mandatory fees. Mandatory fees are those required to be paid by all students attending the particular school as a condition of enrollment and identified in the tuition schedule.

Are families charged any fees for participating in the Plan?

No. There are no entry fees, annual fees, service fees or exit fees if tuition certificates are redeemed to pay for tuition and mandatory fees at participating schools.

As with any 529 program, if an account owner takes a refund and does not use the money for qualified higher education expenses, any increase in the value of the initial contribution amounts (the difference between your contribution amount and the amount refunded) will be subject to federal income tax as well as an additional 10% tax.

Who is eligible to purchase or own a certificate?

Any adult U.S. citizen who wants to help fund a private college education for children, grandchildren, a loved one or even themselves, may open an account and own tuition certificates. There are no income limits for participation.

An account may also be opened in the name of a trust, estate or business for a scholarship for unnamed beneficiaries.

Who is eligible to be named a beneficiary?

Anyone. At the time a certificate is purchased, the account owner must provide a U.S. Social Security number for the designated beneficiary.

Is there a specified enrollment period to purchase a certificate?

Unlike many state sponsored prepaid tuition programs, Private College 529 Plan has no set enrollment period.

Tuition rates at participating schools do change at the start of each program year (July 1).

What is the program year?

The Private College 529 Plan program year runs from July 1 through the following June 30.

When can tuition certificates be redeemed?

A tuition certificate (representing all purchases for a single beneficiary during a given program year) must be held a minimum of 36 months from the first purchase within that program year before it can be redeemed.

A tuition certificate is eligible for refund or rollover to another Section 529 plan after 12 months. The 12-month holding period is waived in the event of a beneficiary's death.

How do account owners stay informed about the progress in their Private College 529 Plan account?

Upon opening a Private College 529 Plan, account holders have an opportunity to select up to five "sample" participating colleges and universities to monitor. Each quarter account owners will receive a statement that displays the value of their contributions and the percentage of prepaid tuition covered by those contributions for each 'sample' school. Account owners may also track and update "sample" schools online anytime.

Choosing "sample" schools neither guarantees admission for a beneficiary nor locks a beneficiary into any decision about which school to attend.

What is the financial aid treatment of a Private College 529 Plan certificate?

Private College 529 Plan accounts are treated the same as state sponsored 529 plans, as assets of the account owner.

Are penalties assessed if certificate values are diverted to other uses?

Should the account owner take a refund from an account, program management fees may be assessed. As with any Section 529 program, if the refunded amount is not used for qualified higher education expenses under the federal tax law, any increase in the value over the purchase amount is subject to federal income tax as well as a 10 percent additional tax.

Can a certificate owner change the beneficiary?

Yes. However, the new beneficiary must be a 'member of the family' of the current beneficiary. According to the IRS, a "member of the family" includes biological and step-parents, siblings, children, nieces and nephews; parents, siblings, children, nieces and nephews by marriage; legally adopted children; and half-brothers or half-sisters.


ALUMNI OFFICE CONSIDERATIONS [back to top]

How can Private College 529 Plan be useful to a school's alumni office?

Participating in Private College 529 Plan shows alumni that your school is offering a solution to the rising costs of tuition.

How can Private College 529 Plan be useful for schools that seek legacy students?

Participating schools can use available marketing resources to reach out to alumni families early, keep their school's name top of mind, and deepen the affiliation by offering a smart way to prepare for the cost of private college.

How can colleges and universities help alumni save for college?

Adding a "Saving for College" section on an alumni website can be an effective and useful benefit for alums. TPC hopes that participating schools will highlight Private College 529 Plan on alumni websites and other communications to alumni. By doing so, schools demonstrate a commitment to keeping college affordable for future generations.

To promote other savings options in addition to Private College 529 Plan, schools can spread the word about state-sponsored 529 college savings plans, Coverdell ESAs (available at local banks and from some brokers), U.S. Savings Bonds (available at banks and U.S. Post Offices), and other college savings vehicles. Communications can include a link to collegewithinreach.com, a site with useful information for parents and other family members.

The TPC staff and the Program Manager, OFI Private Investments Inc., are willing to work with schools to help make the program a success. Please note that your school's alumni office is not required to help market Private College 529 Plan or TPC.

Is there a way to know if alumni and friends are signing up?

Account owners may select up to five "sample" colleges or universities to help them track their progress and know the percentage of tuition and mandatory fees their tuition certificates cover at each "sample" school. Please contact TPC for more information about how many account owners are tracking your school.


MARKETING ISSUES [back to top]

What marketing and administrative services does the program provide?

As a member college you have a vested interest in the plan's success, so we encourage you to take advantage of the resources we provide to help you market the plan to your alumni and community. There are many ways you can use our materials to spread the word about your participation in Private College 529 Plan. Of course, you are not required to promote the plan or TPC in any way.

Can the consortium describe a member institution, use its logo, or otherwise represent the school without its permission?

No. All such representations require the member school's approval.

Are account owners led to believe that beneficiaries are guaranteed admission to a particular institution?

No. All consumer materials, including regular quarterly statements, contain the explicit message that ownership of a Private College 529 Plan account has no bearing on student admission. Participating colleges and universities must also sign a statement upon joining the Plan and TPC to that effect as part of the obligations of participation.

Related Links

FAQs

Q: What marketing services does Private College 529 Plan provide?

A: Participating colleges and universities have a vested interest in the Plan's success, so we encourage schools to take advantage of the resources provided to help market the Plan. Find out how your school can use our materials to reach alumni and the community.

View all FAQs



Private College 529 Plan is established and maintained by Tuition Plan Consortium, LLC. Invesco Advisers, Inc. is the program manager. Participation in the Plan does not guarantee admission to any college or university, nor does it affect the admissions process. Tuition certificates are not insured or guaranteed by the FDIC, TPC, any governmental agency or Invesco Advisers, Inc. or its affiliates. Purchasers should carefully consider the risks associated with purchases and refunds of tuition certificates. The Disclosure Statement, including the Enrollment Agreement, contains this and other information about the Plan, and may be obtained by visiting privatecollege529.com or calling 1.888.718.7878. Purchasers should read these documents carefully before purchasing a tuition certificate.
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