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How The Plans Work

PLAN and DESCRIPTION

INSTALLMENT: Tuition bills are paid over several months instead of in two big chunks. Participants pay enrollment fee of up to $75; some schools levy 1% finance charge on balance.

PREPAID TUITION: Parents prepay tuition in installments or lump sum, locking in future college costs at today's prices. The increase in the value of the tuition credits is exempt from state taxes, deferred on the federal level until disbursement.

SAVINGS BONDS: Federal and state savings bonds are sold at deep discounts to maturity value and grow tax-free when earmarked for college.

SAVINGS TRUST: States offer savings accounts for college tuition with various tax advantages and interest rate guarantees.

DATA: COLLEGE SAVINGS PLANS NETWORK, BUSINESS WEEK



Updated June 14, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.
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