Headlines, especially of late, can be controversial. The alleged pending death of higher education has been recent headline fodder, including “The End of College as We Knew It?” “On Collegiate Death and Dying,” “The Oddsmakers of the College Deathwatch,” and the more optimistic, “Disrupting the Disruptors: Why Traditional Higher Education Isn’t Dead Yet.”  

I’m not a gambler, but as the president of Private College 529 Plan, I think the odds are with America’s higher education system, recognizing that change is necessary. Research by the Pew Foundation finds those most affected by the Covid-19 economic fallout in the U.S. labor market include those with less education. Workers with just a high school diploma lost jobs at nearly triple the rate as those with a college degree during the first several months of the pandemic.

College Board’s Education Pays 2019 report found that those who have “higher levels of education earn more, pay more taxes, and are more likely than others to be employed.” For example, median earnings were higher by nearly $25,000 a year. 

Yet, the Covid-19 pandemic likely disrupted the plans of many students who had intended to return to — or start — college this fall. Fifty-six percent of college students say they can’t afford tuition, according to OneClass, which surveyed more than 10,000 freshmen, sophomores and juniors from over 200 U.S. colleges and universities. Roughly half of undergraduates said that because of the pandemic’s impact on their finances, they needed to rethink how they will pay for school. 

The cost of college can be significant, which means saving for a degree is critically important and should start early. Unfortunately for many families, even though they may have been saving money for years in a traditional 529 plan — a tax-advantaged savings plan designed to encourage saving for future college costs — because these plans are tied to the stock market, the accounts may have lost significant value shortly before this fall’s tuition bills arrived. 

Even in a strong economy, saving for college can be challenging for many families given the monthly resource allocation. An alternative to a traditional 529 plan worth exploring is a prepaid 529 plan, like Private College 529.  They don’t react to the movement of the economy and markets, providing a safer, more secure way to put away money for a child’s college tuition. 

Private College 529 is the only way to lock-in tuition costs at hundreds of great private colleges across the nation. With a Private College 529 account, families can avoid both rising costs for higher education and market fluctuations. Families pay no fees; every dollar they contribute buys prepaid tuition. 

For families considering a tuition plan, it’s important to know a few key differences between traditional and prepaid types because each has advantages and disadvantages. Traditional 529 plans are managed by 49 states and the District of Columbia, providing families with many plans from which to choose. In addition to the nationwide Private College 529, ten states offer open prepaid plans for state residents to save for that state’s public colleges and universities. Some families even save in both types, because prepaid 529 plans generally are limited to tuition and fees, while funds in traditional 529 plans also may be spent on room and board, books and other college expenses. Savings and prepaid plans are a sound combination! 

Regardless of which way you go, the Covid-19 pandemic has highlighted the importance of planning for higher education costs. Even as colleges and universities across the nation are open in a variety of ways, betting on the power of education is still worthwhile. 


Bob Cole is president of Private College 529 Plan. This article is adapted from an article he published in Forbes in July 2020.  


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