A 529 prepaid tuition plan is a way to pay the cost of tomorrow’s college-inflated tuition prices at current costs.
A prepaid tuition plans allows an individual to pay for a certain number of semesters (or contracts) that can be redeemed in the future. These program administrators then pool the money and make long-range investments so that the earnings meet or exceed college tuition increases. When a child is ready to go to college, the plan transfers funds to cover the tuition directly to the institution.
