529 Strategies - Prepaid Tuition vs. College Savings Plans

As a college solutions specialist with College Funding and Planning in Overland Park, Kansas, Michael Berlau assists families with applying to and paying for college. Michael Berlau draws on a detailed knowledge of college savings vehicles to help families determine the best way of making education both affordable and tax-efficient.

For families who expect to be sending a child or children to college, the 529 plan serves as a tax-advantaged savings vehicle. The plan is available to any US resident or citizen who is 18 years of age or older and is most often used to save for a younger child's education, although it is possible for the account holder to save for his or her own college costs as well.

Each US state and the District of Columbia sponsors at least one 529 plan, while a large number of institutions have their own prepaid tuition plans. The prepaid plans allow an account holder to purchase tuition or fee credits at current prices, to be used in the future. Most such plans feature state sponsors and some may be guaranteed by state governments, though some do not offer a guarantee.

College savings plans also feature sponsorship by the state and are not backed by state guarantees. These plans take contributions from the account holder and place them into investment vehicles, most often chosen by the saver. There are also a number of plans that channel assets into static funds or select investment vehicles based on the beneficiary's age, so that investments become more conservative as the beneficiary moves toward college age.

Like prepaid plans, college savings plans feature state sponsorship but do not guarantee contributions. However, investments in protected bank products may include FDIC insurance.

Good Sources for College Recommendations

Since 2008, Michael Berlau has served as a college solutions specialist with Kansas-based company College Funding and Planning. Michael Berlau helps students and their parents to understand the strategies involved in applying to college, a process that often requires the submission of recommendations.

One of a student's best networking resources is teachers. A teacher can write a personalized recommendation letter and give colleges a sense of your abilities, interests, and personality as a student. Experts recommend asking core academic teachers you had as an upperclassman or teachers you have had throughout your high school career. These instructors are most likely to know you well enough to speak not only of how well you do in class, but how you think and work with material.

Taking the time to network with a school principal can be an even more effective time investment, as a principal's letter can have even more influence over admissions deciders. These kinds of connections do take time, as the principal needs to get to know you well enough to speak about you in detail.

Employers may also be able to give colleges an idea of you as a person outside of school. If you can work well with others, have a strong work ethic, and/or have shown good character in your place of employment, your boss's testimonial can help you to stand out. The same is true for civic or religious leaders who know you well as a person, as well as for adults you know who have connections at a particular college or in the field you wish to study, provided that the person in question has known you for long enough to have a strong sense of who you are and what you can do.