State Prepaid Tuition and
College Savings Plans
To help families save for college, 48 states, including Washington, offer
qualified tuition programs, or Section 529 plans. Earnings grow tax-free
and money withdrawn is tax-free as long as it is used for qualified higher
education expenses. There are two kinds of qualified tuition programs:
prepaid tuition plans and college savings plans.
Prepaid Tuition Plans
These plans allow families to prepay college tuition by investing in
tuition units today. The State of Washington sponsors a prepaid tuition
plan, called the Guaranteed Education
Tuition (GET) program. Students can use their tuition units at any
accredited public or private university, college, trade or technical school
in the country. And accounts can be transferred easily to other family
members if necessary.
Eligibility
Anyone – parents, relatives, or friends -- can participate. There
are no income limits.
Limit
Contribution limits vary from state to state. Contact specific state plans for more information. Washington’s GET program allows families to buy up to 500 units per student. You can contribute to a Section 529 plan and a Coverdell Education Savings Account in the same year for the same child.
How to Set Up an Account
For information about the Washington Guaranteed Education Tuition program,
call toll-free 1.877.GET.TUIT (1.877.438.8848) or visit the
GET Web site. For general information about Section 529 plans, visit
www.collegesavings.org or
call toll-free 1.877.277.6496.
Note: The tax-exempt status of Section 529 plans will expire at the end
of 2010 unless Congress renews it. If it doesn’t, contributions
would return to being tax-deferred until withdrawn. When withdrawn, earnings
would be taxed at the generally lower student rate.
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