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Who controls a prepaid tuition account?
The account purchaser maintains control over all of the money in the account and is the only one who can request account changes or refunds. The student beneficiary does not have any control over the account, unless he or she is also the designated purchaser.
Does the account owner have to be related to the beneficiary?
No. In most states, you can open an account for your child, grandchild, nephew, friend – even yourself. Review the program materials for naming and changing the designated student beneficiary.
Can more than one person make contributions to a prepaid tuition account?
Yes. Generally, anyone can contribute to an account. Prepaying tuition is an excellent gift idea for grandparents, other family members and friends. You should contact the program in your state to determine the specific process to follow to make additional contributions to the account.
Can prepaid tuition plans only be used at instate schools?
Prepaid tuition plan benefits are generally designed to be used at instate public universities and community colleges, however they can also be used at most private institutions and at out-of-state public and private colleges and universities. These programs can be used at most institutions eligible to receive federal financial aid including many colleges and universities located outside the United States.
What happens to my prepaid tuition plan if my child receives a full or partial scholarship?
If the scholarship covers some or all of the student's tuition and fees, the unused prepaid tuition benefits can be transferred to another member of the family, held for possible future use, or a refund can be paid to the purchaser on a semester-by-semester basis.
What if my child decides not to attend college?
Refund and transfer options are available. You should check with the program to determine who the benefits can be transferred to or how to receive a refund from the account.
Does a prepaid tuition account guarantee college admission or instate tuition?
No. Having a prepaid tuition account does not affect your child’s chances of getting in to a particular college or your eligibility for instate tuition rates.
Can a prepaid tuition account be rolled over to another 529 program?
Generally rollovers are allowed. For instance, if the beneficiary of the account decides not to attend a post-secondary institution, the account owner can typically transfer funds in the account to another eligible beneficiary. To avoid penalty and income tax, the new beneficiary must be a member of the family of the original beneficiary. Additionally, you should check with the program you participate in to determine if there are other requirements that may apply.
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