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The Wall Street Journal reports that tuition-rewards programs set up like frequent flier programs offer and tuition-discount programs are catching on as ways to encourage people to save for college via 529s and not rely so heavily on financial aid. You can find the best-performing 529 college-savings plans via this post, but here are some of the extra incentives you can expect to see more of in the future:
- SAGE Scholars, an education finance company, offers a tuition-rewards program for the Pennsylvania and Wisconsin 529 plans. Plan members gets points tallied quarterly at 1.25 percent of total account values. Each point equals a dollar toward tuition at 213 schools. Families can accrue as much as one year's tuition but only if spread over four years. The average discount awarded to students in 2007 was $6,192 or $1,548 a year.
- Working in tandem with plans like the Independent 529, administered by TIAA-CREF, some schools guarantee a rate of return above the 529 rate -- anywhere from 0.5 percent to 4 percent, which Dickinson College in Carlisle, Pa., recently began offering.
- Some public universities are offering scholarships between $500 and $1,000 to students who use 529 funds to help pay for school. This is something everyone should ask about because not many know about these extra funds. Washburn University in Kansas only hands out about 10 of these scholarships a year because that's how many inquiries come in for them.
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