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South Carolina Tuition Prepayment Program

South Carolina

The South Carolina Tuition Prepayment Program has been closed to new enrollments until further action by the South Carolina General Assembly. The program offered two-year or four-year tuition packages to South Carolina families.

5-Cap Rating

Resident:
Non-Resident:

Savingforcollege.com's 5-Cap Ratings provides an evaluation and comparison of 529 plans, utilizing a formula that examines dozens of factors grouped into the following categories. (Scale 0 to 5; 5 is highest)

General

Program type:

Prepaid contract

How to enroll:

Enroll directly with the program.

Initial year of operation:

1998

State agency(ies):

Office of the State Treasurer

Enrollment period:

The most recent enrollment period ran from March 1 through May 31, 2006. It has been closed to new enrollment and will not reopen until the S.C. General Assembly authorizes the program to accept new participants.

Eligibility

State residency requirements:

The beneficiary must be a South Carolina resident for at least 12 months prior to program enrollment .

Who can be a participant/owner in the program?

U.S. citizens and resident aliens, UGMA/UTMA custodians, and legal entities.

Significant time or age restrictions imposed by the program:

The beneficiary must be in the 10th grade or below as of the beginning of the enrollment period. Contract benefits must be used by the time the beneficiary is 30 years old, with extensions of up to four years granted for military service.

Contractual Features

Contract prices:

For the Spring 2006 enrollment period, prices ranged from as little as $17,088 (tenth grader) for the two-year plan to as much as $44,282 (infant) for the four-year plan. An extended monthly payment plan is available.

Available tuition packages:

Four years of undergraduate tuition and fees or two years of undergraduate tuition and fees at a South Carolina public institution. Beginning with the 2007-2008 school year, annual tuition benefit increases under the program are capped at 7 percent, and state public institutions are required to waive any excess tuition increases for program participants.

Benefits for beneficiary attending private or out-of-state institution:

Lesser of the weighted average tuition rate in effect for South Carolina public universities at that time or the actual tuition billed by the institution.

Contract payment options:

Lump sum, 48 monthly installments, monthly installments through the year of projected enrollment, or down payment with reduced monthly payments.

Are program benefits backed by the full faith and credit of the state?

No

Are program benefits collateralized or guaranteed in any other way?

Yes, the state legislature is required to consider, but not necessarily approve, an appropriation to return all payments plus 4% interest in the event the program is canceled.

Fees & Expenses

Enrollment or application fee:

$85

Taxes and other Benefits

Program match on contributions:

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State tax deduction or credit for contributions:

Contributions, including rollover contributions, to a South Carolina 529 plan are fully deductible in computing South Carolina taxable income.

State tax recapture provisions:

The principal portion of nonqualified withdrawals from this plan are included in South Carolina taxable income to the extent of prior South Carolina tax deductions. Rollovers apparently are not subject to recapture.

State tax treatment of qualified distributions:

Qualified distributions from South Carolina and non-South Carolina 529 plans are exempt.

State tax treatment of rollovers:

South Carolina follows federal tax-free treatment.

Does the sponsoring state exclude the value of an account for state financial aid purposes?

No

Does participation in the program provide beneficiaries with any advantages in qualifying for resident tuition status at state institutions?

No

Does the program have a formal agreement with a rewards program or outside scholarship program?

No

Statutory protection of an account from creditors:

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Distributions & Terminations

To whom are distributions made payable:

Tuition benefits are paid directly to the eligible educational institution and refunds are paid to the account owner.

Account Changes

Policy regarding participant/owner changes:

Accepts requests to transfer contract ownership ($25 fee).

Contact

Web site:

Click here to visit

Telephone:

1-888-772-4723

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