Is it Sound College Financial Planning anymore to Trust in 529 Plans?

State workers around the country haven't really been having things go their way recently. Their pension plans aren't what they used to be and if they haven't lost their right to organize already, they're about to lose it very soon. Of course, it hasn't been any kind of ideological stand by the government that has led to any of this. Primarily, it is the budget crises in many states that have forced governments to consider moves like this. Those very budget crises however, have other more widespread effects that every family should come to feel sooner or later. For instance, public universities no longer enjoy the kind of funding they once did; and families no longer have access to the kind of aid that they once did, either. The Hope scholarship in Georgia that has been a kind of bottomless barrel of generosity for meritorious students for ages is cutting back; tuition costs in California have risen to unbelievable levels; and in Tennessee, parents can no longer a lock in the tuition they will pay for their children by paying in advance. It might be fair to say that the college financial planning methods that we always thought we knew our way around are due for a change.

In the state of Illinois, families are finding that their 529 college financial planning has gone completely awry. The state hasn't been able to grant them the returns they were promised. And that hasn't even been the most upsetting discovery that these families have made. Up until now, when families invested in prepaid plans to help lock in tuition prices at today's rates they always thought that the lock was completely guaranteed. They have recently been made aware of how should the state somehow not be in a position to meet its obligations, there is nothing anyone can do. If those families always felt that they had a guarantee, it's because they didn't read the fine print that let the state off the hook. South Carolina, Nevada, Pennsylvania and other states, along with Illinois, offer no guarantees. Florida, Washington and Mississippi though, do offer such a guarantee.

If you haven't really seen it happening in your state where the college financial planning that they offer turns out to be underfunded, you could expect it to happen soon. If you have placed your trust in some kind of 529 college financial planning, that isn't a terrible decision to have made, of course. But you do need to set aside some extra money just in case the state doesn't give you all that you were promised.