Richmond, Va., Feb. 01, 2021 (GLOBE NEWSWIRE) -- College costs have increased consistently over the last three decades, leading many families to wonder whether it is possible to save for their children’s futures when the tuition price tag feels like a moving target. Virginia529, the largest 529 plan in the country with almost 3 million accounts, has offered education savings solutions to families for almost 25 years. Today, it announces a new savings option designed to provide an affordable way families can save for their children’s future and keep up with rising tuition costs.
The new savings option, called the Tuition Track Portfolio, is part of the highly rated Invest529 program as an exclusive option for Virginia residents. The portfolio tracks average tuition growth at Virginia public universities (Average Tuition) and avoids market risk by protecting families’ principal investment. With the Tuition Track Portfolio, families purchase units that may be used to cover tuition and other qualified higher education expenses.
The value over time of units will keep pace with Average Tuition at Virginia’s public universities. Tuition Track Portfolio units are priced annually based on current Average Tuition, with each unit representing 1percent of annual Average Tuition and 100 units equaling one year of Average Tuition. When it is time for a student to use their funds to pay for their education the value of the units is equal to the then current Average Tuition and may be used at any eligible educational institution and for any postsecondary qualified expenses.
With more than half of Virginia’s four year public colleges and universities currently having tuition costs under Average Tuition, 100 units a year used at those schools will cover all tuition and fees plus additional qualified expenses; if used at a community college or other qualified certificate or apprenticeship programs, the units’ value could go even farther. “Education beyond high school is not a luxury, but more often a necessity to attain a full range of options and opportunities in the future.
There is no single path or timeline for a student; however, when an individual is ready for the next step in their education journey, Virginia529 wants them to be prepared and not have to sacrifice their financial independence or take on substantial debt to secure that education,” said Mary Morris, CEO of Virginia529. “The Tuition Track Portfolio is a continuation of our ongoing commitment to provide Virginia families access to an affordable pathway to their future.”
Families control how many units (or fractions of units) to purchase based on their budget, timeline, and savings goal. Unlike Virginia529’s legacy Prepaid529 program, the Tuition Track Portfolio is open year round and units will have the same value no matter where a student goes to school, whether it is a 2-year or 4 year public or private college or university, in-state or outside of Virginia. For more than 20 years, Virginia529 offered Prepaid529, offering contracts to cover semesters of tuition.
Existing contracts are not affected by this new savings option and their terms continue unchanged. Prepaid529 remains strong; however, the steep increase in the cost of higher education caused the cost of these contracts to move out of reach for most Virginia families. Meanwhile, Invest529 continues to grow in popularity and reputation based on low fees, low opening balances (as little as $10 opens an account), tax advantages, outstanding flexibility, and diverse investment options.
In May 2019, Virginia529 permanently closed Prepaid529 to new enrollment to make way for creation of the Tuition Track Portfolio within Invest529. Visit Virginia529.com to learn more about the Tuition Track Portfolio. Families can watch a short video on the new option, use the Tuition Track Calculator to estimate future tuition, determine whether the option fits their budget, and open an Invest529 account to started planning for the future.
Already have a Virginia529 account? Account owners may open an additional account or move funds from any existing account to the new Tuition Track Portfolio.
About Virginia529 College Savings Plan: Virginia529SM makes education more accessible and affordable for families and individuals. With more than $91.5 billion in assets under management and 2.8 million accounts as of December 31, 2020, Virginia529 is the largest 529 plan in the country. Two flexible, affordable, tax-advantaged programs–Invest529SM and CollegeAmerica®–and early commitment scholarship program SOAR Virginia® --assist students of any age in reaching their higher education goals. For more information on Virginia529’s education savings options, visit Virginia529.com or call 1-888-567-0540 to obtain program materials. These include information on Virginia529 programs, investment objectives, risks, charges, expenses, and other important information; read and consider them carefully before investing. All investments are subject to risk, including the possible loss of the money you invest. Virginia529 encourages prospective participants to seek the advice of a professional concerning any financial, tax or legal implications related to opening an account. For residents of states other than Virginia: before investing, you should consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protections from creditors that are only available for investments in that state’s qualified tuition program. ©2021 Virginia College Savings Plan. All Rights Reserved.