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or private institutions). Under the WAT program, the


payout would be the same for all students, whether they attend in- state, out-of-state public or private institutions. Students attending more expen-


sive schools would have to make up the difference between the WAT payout and their actual cost of tuition and fees. On the other hand, students


attending less expensive schools might have money left over, which they could use for other expenses, such as books. “What you give up is the certainty


that we’ll cover tuition and fees at the most expensive state schools … but what you gain is you’re paid the same thing no matter where your child goes … to a private school or to a school out of state,” Morris says. Legislation to enact the WAT model did not pass in the last General Assembly session. Some legislators expressed concern about a shift away from paying the full cost of tuition and fees at state institutions.


JLARC says the WAT model


would have several advantages over the current model including the “potential for reduced contract pricing and more flexible payment terms.” At the request of the General


Assembly, JLARC is reviewing the WAT model to determine how it might affect payouts, contract costs, plan sustainability and other issues. JLARC is to report on its findings at its November meeting.


CollegeAmerica plan Virginia529’s most popular educa-


tion savings plan is CollegeAmerica, which has $62 billion in assets. But there are only about 200,000 Virginia families among its 2.3 million account holders. Morris says CollegeAmerica always was positioned as a national program. CollegeAmerica is the product of


partnership between Virginia 529 and Capital Group, a private mutual fund company. Private financial advisers sell the accounts, which are invested in vari-


ous mutual funds through American Funds. Account holders work with advisers to determine how their money is invested. Besides CollegeAmerica and


its prepaid plans, Virginia529 also offers another fairly popular college- saving plan: Invest529, with more than 272,000 accounts. Invest529 allows account hold-


ers to save at their own pace through options ranging from bank savings accounts to a portfolio of investments. Proposed changes at Virginia529


reflect ongoing changes throughout the 529 industry. For example, Morningstar has


reported that the 529 industry has ini- tiated changes to reduce expenses, as well as to improve the asset-allocation approach in aged-based portfolios “to smooth out the transition from stocks to bonds as the beneficiary ages.” Virginia529 plans certainly aren’t


the only way to save for college, but par ents should start early and have a defined strategy, financial advisers say.


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