The Virginia College Savings Plan extended its deadline Monday for families to enroll in the Virginia Prepaid Education Program to March 15 because of an increase in the number of families enrolling in the program. Compared to last year, about 15 percent more families this year are participating in the commonwealth’s cost-saving payment plan, according to a VCSP press release.
Launched in 1996 to help families counter the rising cost of college tuition, VPEP was among the first higher education savings programs in the country governed by section 529 of the United States Internal Revenue Code, a VCSP spokesperson said. VCSP offers four different 529 programs, including VPEP, which allow families to receive tax deductions and benefits while saving for college.
VPEP allows individuals saving for college to invest money free of federal taxes in an account at a rate consistent with yearly college tuition changes, allowing families to negate inflation by paying for future college expenditures at today’s prices, the spokesperson said.
According to VCSP, families usually only have a three-month window to enroll in VPEP, as actuaries at VCSP must determine the yearly college inflation rate from college tuition fees across the country. This year’s two-week extension is intended to allow more families to take advantage of the program.
Yvonne Brown, director of guidance at Albemarle High School, said she agreed with VCSP’s decision to extend the deadline. She said she has seen an increase in the number of families struggling to pay for college, and noted that the extension could help families in need.
“A lot of parents tell me they do not have the money to pay for college,” Brown said. “If students want to go to a top school, a lot of them must re-evaluate which schools they can get into and how much they’d have to pay to go there.”
The University, however, has yet to notice significant increases in the number of students not attending for financial reasons, Financial Aid Director Yvonne Hubbard said.
She also said, however, that she expects more students and families will accept loans from AccessUVa, the University’s financial aid program. The University is preparing for the possibility of decreased enrollment during this year’s summer session as well, she said.
“We’re ready for all the different ways families will want to spend less and borrow more,” Hubbard said, noting that the recent economic downturn will continue affecting college students and their families.
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