While many Iowans are saving for their kids’ tuition through the state-run College Savings Iowa plan, there’s an alternative.
Bob Cole is president of Private College 529, which allows parents and other loved ones to save for a child’s tuition at any of nearly 300 private institutions nationwide, including more than a dozen in Iowa.
“The advantage of our plan is that we’re owned and operated by the colleges which means that they guarantee the tuition and they pay all the fees associated with families,” Cole says. “If a family invests in our plan, 100% of what they save goes towards prepaying tuition.” The money saved in state-run programs can be applied to tuition at any school, private or public, while the private college plan, as the name implies, is only for private schools. What’s the advantage of going the private route?
“It really comes down to risk,” Cole says. “The interesting thing about our plan is the colleges and universities assume the risk, whereas with savings plans, the risk is really taken on by the family. It’s depending on the market.” The father of two young children, Cole has two college savings accounts for each child, one each through a state-run program and another through the private plan.
“My savings plan has had very good years and I’ve had some very tumultuous years in the market as well,” Cole says. “It really depends. The nice thing about ours is, it’s steady. We know that there’s going to be tuition increases. They tend to be between 3% and 4% and I’m guaranteed to get that.”
The Iowa schools associated with Private College 529 include: Buena Vista University, Central College, Clarke University, Coe College, Cornell College, Dordt College, Graceland University, Grinnell College, Loras College, Luther College, Northwestern College, Simpson College and Wartburg College.