State based plans have a serious advantage: Many lock in the cost of college at the year you start the plan. College has increased in price by 350% for private college and 200% for public in the last 15 years.
{vent}
So not be rude, but few over the age of 30 have any clue about what is needed to atttend college now. Most are nostalagic and have a skewed view of what their kids go through to attend college. College work loads since 1990 are about 600% of the average workload between 1950 and 1980. In concurence, the average private college costs 20,000 a year and public is between 7500 and 10,000 a year. For those without family help, that could mean as much as 200,000 in dept for a top tier school
{/vent}
Most colleges view the money at it's modern value so; say i had the price locked at 4500 a year for florida, with current tuition being 7500 a year. even though i only pay 4500 a year, the school reviews my need as if i need 7500 a year. In state schools this often works, but only for schools within the state of the plan.
I choose to attend school at The Rhode Island School of Design, so my tuition need is 45,000 a year. Florida simply sends along the 4500 it would have paid an in-state school and my private college views it as part of my income in calculating need. Most in state private colleges will do the same, view it as part of your yearly income in deciding need.
In state sponsored 529 plans, you never pay income tax on the money saved, as even when withdrawn it's used for education and is exempt. however, if they choose not to attend college and get paid out (state plans pay you out if you don't attend college at all by age 25) then you get the defered tax bill.
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Last edited by arch13; 05-16-2004 at 12:36 AM..
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