VA 529 Prepay funding question

[psuindc]

Originally Posted by acgood

My personal preference is to steer clear of the prepaid program and invest what you can afford to in the 529 accounts instead.

I am also of this preference. There are already a few states that have had their "prepaid" programs become at risk of defaulting on their obligations. This is similar to a pension fund... if the market tanks on their investments, they might not be able to keep their promises. I'm not sure if these prepaid programs have any federal protection from screwups like that.

We're doing $5000/yr for our son, from birth, and seeing where the market takes us. That's enough to get the tax break and then some. Plus, if we move out of state for whatever reason... or he wants to go out of state,
they'll pay as much as the most expensive VA public school. I'm not sure what the prepaid program offers if the child goes out of state.

[acgood]

The newborn price quote is something like $113,000 paid over 18 years. For that sum I am going to invest prudently on my own and have actual control over the proceeds.

Another belief I have is that tuition will not continue to compound at 6-10% per year - I just don't view it as sustainable.