The Stanford Daily (Stanford)
(U-WIRE) STANFORD, Calif.-Until recently, students with prepaid tuition plans have had their eligibility for need-based aid reduced dollar by dollar. Both the U.S. Senate and House of Representatives have recently approved a measure, to take effect on July 1, that eliminates this penalty. A prepaid tuition plan allows families to prepay all or part of a student’s tuition today for future use at a specific college or group of member colleges. When the student enrolls at that college or one of the member colleges, the prepaid tuition is redeemed with the percent of tuition previously purchased despite any price increases.
Stanford has been a participant in the Independent 529 Plan, named after the Internal Revenue Code section that authorizes such programs, since 2003. According to the Office of Financial Aid, the number of families taking advantage of this Independent 529 Plan at Stanford is small because the program has been in existence for a relatively short time.
The new regulations concerning prepaid tuition plans are designed to better allow families that use them to obtain need-based financial aid.