How Your Family Benefits
A Better Option Than Traditional Borrowing
Unlike traditional parent and student loans, which result in fixed monthly payments regardless of the borrower’s income, Providence Promise ensures that you and your child will only be responsible for an income-based monthly contribution.
Greater Opportunities for Your Child
By 2018, the majority of all jobs in Rhode Island and across the country, will require a degree beyond high school. When your child graduates from a higher education program, he or she will have a greater chance of entering into a successful, fulfilling, well-paying career than those who did not continue their education beyond high school. In addition, the danger of unemployment declines dramatically as the level of education rises.
Contributions Based on Income: Protection Against Income Loss or Reduction
As the parent or guardian, you will contribute about one percent of your gross annual household income for 15 years for each of your enrolled children. After your child graduates from an eligible higher education institution, he or she will contribute nine percent of his or her gross annual household income to the program for 10 years, on average.
Your contributions are tied directly to your income. If your income goes down, your contributions go down, and if you become unemployed and have no income, your monthly contribution will be reduced to $5 until you have a source of income. The same is true for your child after he or she starts to make contributions.
Your child will have up to 10 years after high school graduation, in addition to any years of military or philanthropic service, to decide on continuing his or her education.
To ensure safety and security, your contributions will be deposited into your personal CollegeBound Saver 529 account, which is the 529 plan sponsored by the State of Rhode Island. Ascensus, which administers these accounts, provides program management and administration services for 31 plans across 17 states with 3.4 million accounts and over $66 billion in assets under administration. CollegeBound will issue statements to you quarterly.
If you decide to withdraw from the program at any time prior to your child continuing their higher education, or if your child decides not to pursue higher education for any reason, your contributions will remain in your 529 College Bound account. You may choose to keep the account open and continue to make contributions, transfer the account to another child, or withdraw your funds.