Boston, MA (PRWEB) May 29, 2012
One of the nation’s safest college savings options, the MEFA U.Plan Prepaid Tuition Program has opened its annual enrollment. Families have until June 30th to deposit college savings into the U.Plan and lock in future tuition percentages at today’s rates.
“One of the big advantages of the U.Plan is the lack of volatility. Unlike a stock or a mutual fund investment, parents know what their U.Plan tuition certificates will be worth when they are ready to be used to pay for college,” said Thomas Graf, Executive Director of MEFA, the state’s not-for-profit experts on college financing solutions, which is celebrating its 30th anniversary.
During the annual U.Plan enrollment period, families deposit their college savings to purchase tuition certificates backed by Commonwealth of Massachusetts general obligation bonds. Upon maturity, the tuition certificates can then be redeemed to pay for one of 80 participating Massachusetts public and private colleges and universities.
For example, if a college's tuition today is $10,000, a $1,000 investment locks in 10 percent of the future tuition, regardless of the actual, eventual cost. If the future tuition is $15,000, the initial 10 percent investment of $1,000 will cover $1,500 of the tuition. This unique feature means the U.Plan is a principal-protected college savings option. Families may invest up to 100 percent of a child's future college tuition at today's rates.
Now in its 17th year, the U.Plan has helped about 38,000 families save for college. Important features of the U.Plan include:
- Flexibility: There’s no requirement to pick a college or university before the child is accepted to one of the 80 participating colleges or universities.
If the child attends a college outside of the network of U.Plan colleges and universities, the investment is returned to the account owner along with interest compounded annually at the Consumer Price Index.
- Tax Savings: U.Plan earnings are exempt from state and federal tax, with some limitations for Massachusetts residents.
- Low investment: Investment in the U.Plan is permitted only during the annual enrollment period and the minimum investment is $300 per maturity year.
- When applying for financial aid, the U.Plan is treated as an asset of the account owner, and if it’s the parent, 5.6 percent is factored into the federal financial aid formula.
For more information on the U.Plan, call 1.800.449.MEFA to speak with a U.Plan customer service representative or visit http://www.mefa.org/uplan
MEFA is a not-for-profit self-financing state authority, not reliant on state or federal appropriation that has been working for 30 years to make higher education more accessible and affordable for students and families in Massachusetts. MEFA was created by the state legislature at the request of Massachusetts colleges and universities and provides community education programs, college savings plans, and low-cost financing options. In its 30 year history, MEFA has assisted hundreds of thousands of families in financing a college education. For more information, visit http://www.mefa.org or call 1(800)449-6332(MEFA).