Education Law Commons^™

Taxation Of Prepaid Tuition Plans And The 1997 Tax Provisions - Middle Class Panacea Or Placebo? Continuing Problems And Variations On A Theme, Eric A. Lustig

Akron Law Review

This article addresses the continuing tax issues and policies attendant to one form of financing the costs of higher education -- prepaid tuition plans. These plans generally allow one to purchase tuition in advance for future use. One attraction of such a plan is that the purchaser can lock in tuition at present rates, thus protecting against inflation and other tuition hikes. Moreover, favorable tax treatment exists as the build up of benefits is generally tax-free to the purchaser, which provides a significant advantage over other savings programs. Although prepaid tuition plans have been in existence for a number of …