Private College 529

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College Saving Option Comparison

 

Features Private College 529 Plan 529 College Savings Plan Coverdell UGMA/UTMA
Federal Tax Exemption Tax-free if tuition certificates used for qualified withdrawals Tax-free if money used for qualified withdrawals Tax-free if money used for qualified withdrawals For certain children under age 19 and full-time students under age 24, earnings above $1,900 are taxed at the parents' rate.
State Tax Exemption Depends on State Depends on State None None
Gift Tax May contribute up to $14,000 ($28,000 for married couples) per child or a combined five year gift of up to $70,000. ($140,000 for married couples)1 May contribute up to $14,000 ($28,000 for married couples) per child or a combined five year gift of up to $70,000. ($140,000 for married couples)1 May contribute up to $14,000 ($28,000 for married couples) per child or a combined five year gift of up to $70,000. ($140,000 for married couples)1 May contribute up to $14,000 ($28,000 for married couples) per child or a combined five year gift of up to $70,000. ($140,000 for married couples)1
Estate Tax Contributions are not considered part of giver's estate (a portion of the contributions included in donor's estate if giver dies during five-year election period) Contributions are not considered part of giver's estate (a portion of the contributions included in donor's estate if giver dies during five-year election period) Contributions are not considered part of owner's estate Contributions are not considered part of donor's estate unless donor remains custodian
Account Owner Income Restrictions None None To contribute annual maximum allowable amount, must make less than $95,000 if single, $190,000 if married. Partial contributions can be made by single income tax filers making between $95,000-$110,000 and joint income tax filers making between $190,000-$220,0002 None
Contribution Limits The cost of 5 years full time tuition at the most expensive participating school in Program year ($256,500 for 2015-2016) Depends on plan. Usually more than $300,0003 2,000 per year4 No contribution limits
Who Controls the Account Parent/account owner Parent/account owner Parent/account owner Child assumes control at 18 or 21 depending on state law
Investment Options No investment options. You purchase Tuition Certificates Assets may be only reallocated once per callendar year or upon change of beneficiary Yes Yes
Investment Risk Assets held in a qualified trust. None. Participating colleges and universities bear financial risks5 Subject to market risk, dependent upon underlying investments Subject to market risk Subject to market risk
Fees Assessed No fees charged to account owners5 Typically, an asset based management fee and other administrative fees. May incur sales charge if purchased through a broker/advisor Depends on underlying investment vehicle Depends on underlying investment vehicle
How Assets Can Be Used Undergraduate tuition and mandatory fees at a participating college where beneficiary is admitted and enrolls Can be used for a broad range of college-related expenses Can be used for elementary school, secondary school and college-related expenses No restriction as long as assets are used to benefit the minor
Beneficiary Age Limit None None Contributions must stop when beneficiary reaches age 18, assets must be spent by age 30 Account can be set up for any child under 18 or 21, depending on state law.
Changing Beneficiary Beneficiary can be changed to a member of the beneficiary's family Beneficiary can be changed to a member of the beneficiary's family Beneficiary can be changed to a member of the beneficiary's family Beneficiary can not be changed
Impact on Federal Financial Aid Considered account owner's assets Considered account owner's assets Considered account owner's assets Considered student's assets

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FAQs

Q: What do Private College 529 Plan funds cover?

A: Tuition certificates can be redeemed for undergraduate tuition and mandatory fees, which are typically fees paid by all students who attend the particular college as a condition of enrollment.

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  1. Non-Account Owners have no control over contributions. Only Account Owners may direct transfers, rollovers, withdrawals, investment changes and changes in the Designated Beneficiary.
  2. Phase-out ranges related to potential tax deduction(s).
  3. All assets, including earnings, under all 529 accounts within all plans maintained by a state, established for the benefit of a particular beneficiary, must be aggregated when applying this limit. New contributions will not be allowed once this limit is reached. Earnings, however, will continue to accrue.
  4. Scheduled to sunset at the end of 2010.
  5. There may be tax consequences associated with these options. If you take a refund rather than redeem your tuition certificates for their intended purpose, the refund will be adjusted based on the net performance of the Program Trust, subject to a maximum increase of 2% per year, or a maximum loss of 2% per year. The refund amount will be paid from the Program Trust only. Additionally, the refund is subject to federal income taxes, any state income tax and may be subject to an additional 10% federal tax penalty.
    See Disclosure Statement for details.

Private College 529 Plan is established and maintained by Tuition Plan Consortium, LLC. OFI Private Investments Inc., a subsidiary of OppenheimerFunds, 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 OFI Private Investments 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.
© OFI Private Investments Inc.