How to lock in tuition prices: Private College 529 Plan

How to lock in tuition prices: Private College 529 Plan
While the Private College 529 Plan is not as popular as traditional 529 plans, it is a risk-free investment vehicle that is guaranteed to keep up with the increasing costs of college tuition.
Whether your child is young or about to go to college, you can prepay tuition and hedge against tuition inflation. Families can lock in tuition by buying prepaid tuition certificates at the current price. You can lock in tuition for whatever you are able to contribute.
Around 300 private colleges participate in this tax-advantaged plan.
The price of tuition at private colleges increased on average of 4% between 2000 and 2020.
The average account size is $45,000.
Going this route forgoes potentially larger market returns from traditional 529 savings plans where savers will typically choose from a list of mutual fund investments. The private prepaid plan only covers tuition and fees which is why it is a good idea to also invest in a traditional 529 plan.
Net assets for the Private College 529 Plan were just $334 million versus the $408 billion for all 529 college savings plans.
My opinion is this is an extremely conservative approach with little risk, and little potential return. The longer your timespan, the more sense it makes to be invested in the stock market.
Works Cited:
https://www.investopedia.com/terms/1/529plan.asp
https://www.wsj.com/articles/tuition-saving-private-529-plan-stanford-georgetown-princeton-2e19eca7?mod=hp_lead_pos8
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