Aug 28, 2007 - Claremont, Calif. - Harvey Mudd College (HMC) is participating in Independent 529 Plan, a relatively new prepaid college tuition plan tailored specifically for private colleges.

Responding to a national call to make higher education more affordable and more accessible to students, HMC has joined with more than 250 other private colleges and universities across the country to offer a tax-advantaged way for families to save for tuition.

“We see this new plan as part of our ongoing effort to make higher education accessible to more families,” said Andrew Dorantes, HMC vice president for administration and finance/treasurer. “Independent 529 Plan allows contributors to lock in tomorrow’s tuition at less than today’s price.”

Section 529 plans, named for the IRS code that defines them, have gained in popularity over the last decade. Families are attracted to the plans because earnings on the accounts generate no federal income tax* if used as intended for higher education purposes. As with all 529 programs, assets in an Independent 529 Plan account are transferable to other members of the family, and refunds are available if the student receives a scholarship or decides not to attend college. Additionally, in the case of Independent 529 Plan, assets are refundable if the student attends a school outside of the Tuition Plan Consortium.

For purchasers, the effectiveness of Independent 529 Plan is not dependent on the performance of the stock or bond markets. Rather, contributions actually go toward pre-purchasing tuition certificates,** in part or in whole, at less than today’s price because each school in the plan actually offers Plan participants a discount from current tuition rates.

“Regardless of whether a student attends HMC or another one of the member colleges, Independent 529 Plan represents a way for parents to contribute to, and pay for, private college without worrying about either investment risk or tuition inflation,” said Dorantes.

“Independent 529 Plan proceeds can be used at any of the participating colleges. Think of it as buying a shopping certificate for use at any of the stores at a mall,” added Nancy Farmer, president and CEO of Independent 529 Plan. “Students don’t choose their college at the time of purchase, but years later, after they have applied and been accepted in the regular manner.”***

For example, if private colleges A and B have agreed to honor certificates purchased under Independent 529 Plan. College A has a tuition cost of $30,000 for this current year and college B costs $10,000 to attend. A person who makes a $10,000 contribution into the Independent 529 Plan this year would receive tuition certificates that would cover 33.3 percent of a year’s tuition at college A or a whole year at college B, regardless of how high tuition may be at the time the student eventually chooses to use the certificates.

In fact, because participating institutions must offer a discount off their current tuition fees, the certificates would cover slightly more tuition at each college in this example. At a minimum, institutions must offer a half percent per year off current tuition rates.*** Certificates must be held for a minimum of 36 months before being eligible for redemption.

Individuals can open Independent 529 Plan accounts, browse the most current member college list and explore plan features by visiting the website at www.independent529plan.org. More information is also available toll-free at (888) 718-7878.

Independent 529 Plan allows you to:

• Prepay some or all of future private college tuition** at less than today’s price
• Enroll at any time
• Contribute to an account at any time
• Redeem certificates at any of the participating schools
• Make federal tax-free withdrawals*

Moreover, with Independent 529 Plan there are:

• No special eligibility requirements
• No income limits for participation
• No fees to account owners as participating colleges pay all fees related to management of the program
  

Tuition Plan Consortium is a nonprofit organization based in St. Louis, Missouri, and was formed in 1996 to make education at independent colleges and universities more affordable and more accessible for families in the United States.

The Program Manager is TIAA-CREF Tuition Financing, Inc. (TFI). Its investments are managed by TIAA-CREF Trust Company, FSB, an affiliate of Teachers Insurance and Annuity Association-College Retirement Equities education and research institutions.

The tax information herein is not intended to be used and cannot be used by any taxpayer for the purpose of avoiding tax penalties. It was written to support the promotion of Independent 529 Plan. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.

* This is provided that withdrawals are used to pay for qualified tuition expenses. Purchasers should read the Disclosure Booklet, including the Enrollment Agreement, carefully before making purchase decisions. TIAA-CREF Individual & Institutional Services, LLC distributor, member NASD, SIPC. Tuition Plan Consortium, LLC is the program sponsor and TIAA-CREF Tuition Financing, Inc. is the program manager.

** All references to tuition include mandatory fees. The program does not cover room and board at this time.

*** Participation in Independent 529 Plan does not guarantee admission to any college or university, nor does it affect the admissions process. Each year, each member college offers a discounted rate of at least 0.5 percent less than its current tuition rates. Discount rate can vary from year to year.