Because community college credits are cheaper, "it may be advantageous to pay the community college credit hours out of pocket, and save the university credit hours for use when children transfer to the university, or to downgrade the plan to a community college plan," she says.
There are different options depending on the plan for how any credits remaining after a student has completed a bachelor's can be used, such as transferring the money into a traditional 529 plan or applying the value of the credits toward graduate school tuition.
Scott likes the flexibility she has to change the way her prepaid tuition plan is used later. With an ambitious child, she may decide to apply the credits toward graduate school.
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