Prepaid tuition program opens for enrollment

The College Illinois 529 Prepaid Tuition Program opened this year’s enrollment on Sunday. The program encourages parents and future students to pay for tuition up-front or in installment plans at current rather than future prices. Proponents of the program said it is an effective way to offset rising tuition costs for future students in and out of state.

Three different levels are available for purchase, said Paul Palian, spokesman for the Illinois Student Assistance Commission. The “University Plus Level” is based on the tuition price at the University of Illinois. The “University Level” is an average of the prices at the other four state universities and the “Community College Level” is based on the average in-state community college tuition and fees, he added.

Parents or students who want to use the program must be state residents and can submit applications on the 529 tuition program’s Web site, Palian said.

The current base rate of tuition for Illinois residents at the University is $4,742 per semester, or a total of $36,968 for eight semesters. For students who entered the University during the summer of 2008, the base rate was $4,621. Comparatively, tuition at the University was $600 per semester 18 years ago, and the estimated cost 18 years from now is $180,000 for eight semesters, according to the College Illinois Web site. The rise in costs is the main reason why it is important to lock in the price as soon as possible, Palian said. He added that he bought into the program last year for his daughter and wishes that he lived in Illinois six years earlier when she was born.

“The earlier a parent can buy into the program the better because with today’s tuition fees increasing an average 8 percent each year, it is a great way to save money on college tuition,” he added.

“Payments can be made in large lump sums or through installment payments to accommodate the parents of the beneficiary.”

According to the program’s Web site, the plan is exempt from state and federal income tax if the funds are used toward education.

Wanpen Anderson, account technician at the University’s Office of Business and Financial Services, said she bought into the program for both of her children about seven years ago.

“My son, who is a freshman at Southern Illinois University at Carbondale, is benefitting from the program, and he is also receiving a scholarship. Most parents don’t know about the scholarship refund that they can receive,” she said.

Unused money can be refunded if a “Scholarship Refund Form” is submitted to the program, Anderson added.

If the beneficiary receives a full scholarship, the account can be held for future use, or be transferred to another member of the family.

If the beneficiary receives a partial scholarship, the benefits can be used to cover the tuition and fees that are not paid by the scholarship.

Shakeela Hunter, customer service manager for the University’s Office of Business and Financial Services, said the program’s flexibility allows students to use the prepaid tuition in other states if they choose to.

“If the child who has the College Illinois prepaid tuition wants to go to a school outside of the state, they can transfer it to the school that they attend,” Hunter said.

“For example, if a student chooses a school in California that has a higher tuition, the amount that the parents paid for would be covered, but the difference of the out-of-state tuition would then have to be paid for.”