Prepaid Plan Helps Families Save for College
Beginning this month, families can lock in the cost of required tuition and fees at Texas’ public colleges and universities when they enroll in the Texas Tuition Promise Fund, the state’s prepaid tuition plan.
“The Texas Tuition Promise Fund gives families an affordable, flexible and easy plan to save for their children’s college education,” said Texas Comptroller Susan Combs. “With purchase options ranging from tuition and required fees at the state’s most expensive public four-year colleges to those at Texas’ two-year community colleges, saving for the future fits any budget.”
With the Texas Tuition Promise Fund, families can prepay for a four-year degree, or prepay for just a few classes or semesters at Texas public colleges and universities. Parents of a newborn can pay as little as $16.09 per month in monthly installments until high school graduation for a year of tuition and required fees at a community college. For parents of a second grader who want to prepay the average cost of one year at a Texas public university, the monthly installments are $90.96 per month over 10 years.
Prices based on 2010-11 academic year costs for the state’s public colleges:
* Type I units, priced for tuition and required fees for up to the most expensive public four-year school in Texas, cost $107.44 per unit.
* Type II units, priced at the weighted average of tuition and required fees across all Texas public four-year schools, cost $75.47 per unit.
* Type III units, priced at the weighted average cost of tuition and required fees across all Texas public two-year schools, cost $18.51 per unit.
Under the plan, 100 units equal one academic year of tuition and required fees. Families can buy up to six years (600 units) worth of undergraduate education. The plan offers several payment options, including lump sum payments, pay-as-you go or the installment payment option, which includes an 8 percent annual interest rate.
While benefits are geared toward Texas public colleges and universities, the transfer value of tuition units can also be used toward the cost of career, private or out-of-state schools. Unused units can be transferred to another qualified beneficiary.
Regular enrollment ends Feb. 28, 2011. Children younger than one year of age can be enrolled through July 31, 2011.
For important disclosures and other information about the prepaid tuition program, including a college cost calculator, go to www.TexasTuitionPromiseFund.com or call (800) 445-GRAD (4723), Option 5.