Good news for Virginia residents and their college-bound children: The state just released its new Tuition Track Portfolio (TTP). The new TTP replaces the Prepaid529 plan Virginia had offered from 1996–2019 … but with a nice new feature.
First, it’s worth noting Virginia’s solid college savings track record. Launched in 1994, the state’s 529 program was among the first in the nation, and is now the largest. Virginia was only 1 of 10 states to offer residents a 529 prepaid tuition program in addition to the more standard 529 college savings plan.
As the name implies, prepaid tuition programs let you buy tomorrow’s tuition at a set price. Virginia’s former Prepaid529 allowed you to pre-purchase tuition for a Virginia public 2- or 4-year school at a set price somewhere between then-current and future estimated tuition costs.
As a result, under Prepaid529, if your child ended up attending a low-cost Virginia public school, the pre-paid tuition could actually end up costing more than the rack rate. If so, you didn’t lose your extra prepaid money; you could transfer the unused portion into a college savings program and apply it to room and board. But neither could you come out ahead by selecting a more affordable college. Basically, the program was only a good investment if your child chose one of the more expensive state schools.
Enter the TTP. Now, you can purchase credits that will grow at the average increase in Virginia’s public higher education costs. So, now, you can “profit” by pre-paying for tuition, even if you choose a more affordable college.
For example, 100 credits today equal today’s average tuition for one semester in Virginia. Moving forward, they will grow to equal the same, at then-prevailing rates. When you’re ready to tap into your TTP, your credits will cover tuition for more than a semester at the more affordable Virginia State University (about 1.5 semesters), and less than a semester at the costlier William & Mary. Plus, if you purchase more credits than you need for tuition, you can still spend the extra amount on room, board, and fees.
The new TTP makes sense to me. Check it out at https://www.virginia529.com/invest/tuition-track/.