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Saving For College – Duke’s Childrens Tuition Grant

| September 01, 2018
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Saving for college can be a challenging prospect for many. After saving for retirement, establishing an emergency fund, and making sure you have enough insurance, there is often not much left over to devote towards college savings.

Duke employees, however, have a generous benefit in the Duke Children’s Tuition Grant to aid them in this effort. While it doesn’t make college “free”, as some people think, it does go a long way towards making college… especially private universities… more affordable.

Here is a rundown of this special college savings benefit…

Program Overview (per the Duke Children’s Tuition Grant website)

  • The program provides a grant for undergraduate tuition expenses only, up to 75% of the weighted average of Duke tuition, after applying a per semester deductible ($3,325 per semester or $6,650 per year, for the 2015-2016) and other tuition scholarships.
  • The grant is limited to 2 children per eligible employee.
  • The grant is available for those children pursuing fulltime study of their first undergraduate degree at any accredited college or university.
  • Eligible employees may receive up to a maximum of 16 semesters of tuition assistance, no more than eight of which may be used by any one child. If both parents are employees and are eligible for the grant, the number of eligible semesters increases to 32, but the maximum grant level remains the same as does the eight 8 semesters limit per child.

Not available for UNC system schools

  • The deductible is always just a bit more than the tuition of the most expensive UNC system school (i.e. UNC Chapel Hill), so this grant will not be of any help if you are planning on sending your child to a school in the UNC system.

Eligible Employees

  • Faculty employees, with or without regular rank appointment, receiving wages for Social Security purposes
  • Staff members working at least 30 hours per week
  • Members of Local 77 working within the Duke University Health System
  • Duke retirees meeting certain criteria (see website for more info)
  • Must have at least 5 years of consecutive fulltime service as a regular fulltime employee and must remain in this employment status to remain eligible.

Eligible Children

  • Natural, adopted, stepchildren, children for whom one has legal guardianship, and children of a registered same-sex spousal equivalent, up to the semester or quarter in which they turn age 26 (children of employees who were hired before 01/01/1999 are not subject to the maximum age limitation).

Benefit Taxation

  • The grant is generally considered a non-taxable benefit by the IRS, unless one participates in one of the grandfathered tuition plans, in which case the grant might be considered taxable. (Consult page 276 of the Duke Summary Plan Description and/or call the Duke HR office for more information.)

How Scholarships Affect the Grant

  • If your child receives a scholarship that is specifically designated toward tuition only, then the amount of the grant is reduced by the amount of the scholarship.
  • If your child receives a scholarship that is not specifically designated toward tuition, and is not greater than room, board and fees, then scholarship has no impact on the Children’s Tuition Grant.

Grandfathered Tuition Grant Plans

  • Two earlier plans continue to be available to faculty and 
senior administrative staff. The first plan, available to 
these employees hired prior to 1975, provides up to 100% of
 Duke’s tuition and does not limit the number of children 
eligible. The second plan provides employees hired
 between 1975 and 1986 with a benefit of up to $2,500 per 
child for up to two children, with no deductible. Grants from these plans are considered taxable if you meet the IRS definition of a highly compensated employee, so check with the Duke HR for more information.

Examples

Here are some of examples comparing the costs of attending UNC-Chapel Hill ($24,320 in total costs, before grants and scholarships) versus Rice University ($58,283 in total costs, before grants and scholarships) taking into account tuition-designated and non-tuition-designated scholarships. (Rice is a private university in Houston that one of my clients are sending their son to this fall.)

 

The Bottom Line

For those looking for the most affordable school solution, some UNC system schools are still going to be cheaper than going to a private school with the Duke’s Children’s Tuition Grant.

That said, for those who’d like to send their child to a private school, then Duke’s Children’s Tuition Grant is a fantastic benefit that makes the cost of such an option comparable to sending your child to a state school.

As one of my clients recently emailed me:

“We have been grateful beneficiaries of the Duke Children’s Tuition Grant. Between the Duke grant and the academic scholarship my son received at George Washington University, we have paid no tuition for him and he is heading into his last semester of his senior year. We still have to pay for housing, books, fees, meal plan, etc., but the Duke grant was a godsend. No way he goes to GWU without that.”

For more detailed information, see the Duke Children’s Tuition Grant website and the Duke Summary Plan Description.

PJH


*This article was originally published 03/01/16 and republished 09/01/18. 

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