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[quote=Anonymous]I think 9:21 is providing misleading or inaccurate information.

Here's how it works.  You pay the contract price now for one year of university tuition inVa.  Let's say that price is $13K.  In 10 years, when your child is ready to go to college, if s/he went to to a Va. univeristy, VPEP would pay one year of tuition and fees.  We'll estimate the actual cost for tuition and fees at that time to be $18K (this is just a guess, but we can agree that it's going to be something more than the cost of tuition and fees today -- which is on average $11.5K).

IF your child goes to a private school or out of state school, then VPEP will give you the amount of your contract plus the "reasonable rate of return" (which right now is like 0.5% b/c interest rates are so low -- but years ago it was like 3-4%).  BUT, they will not give you more than the cost of in state tuition and fees (that they would have covered if you went to school in-state).

So, in my example, they will not give you more than $18K (b/c that's my assumption of Va. in-state tuition).  Now, if tuition didn't rise AT ALL from today's rates, and in 10 years the cost of tuition in VA. is still $11.5K (HIGHLY unlikely), then they will only give you that amount even though you paid $13K for the year of tuition.

They will tell you if it is in your best interest financially to transfer the value of your VPEP (pre-paid) to a VEST (savings plan) and there is no cost or penalty to do so.  Perhaps this would be a benefit if you are going to an out of state or private school that costs LESS than Va. in-state tuition (maybe a trade school or something).  Then you could transfer your VPEP to a VEST and you could use it in smaller increments to pay school expenses (like pay $5K for tuition each year and have some left over).  There is no cost or penalty to switch to a VEST -- you just aren't getting the risk/reward of investing for 10 years.

Here's the link and the actual policies of VPEP.

http://www.virginia529.com/documents/vpep/vpep_benefits_guide_2011_2012.pdf
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