One thing that is usually certain in life, is that over time, prices generally rise overall. This is certainly true of the costs of college tuition. With the state of the current economy, it is common now to see prices dropping in retail stores, on new and used cars, etc. However, you might notice that the one area that you won’t see price decreases, even with the depressed economy, is for public or private university tuition! This being the case, it would stand to reason that over time, whether there are good times or bad, the price of college and university tuition will continue to go up and up and up.
It would sure be great if there would be a way to lock in and pay approximately today’s tuition prices eighteen or so years from now instead of what they will be after they have increased each year – for the next eighteen years! Well guess what…there is a way and it is called the Florida Prepaid College Plan.
While Florida public universities are among the lowest cost in the nation – especially for Florida residents, their costs have increased approximately 400 percent over the last 18 years! This means that the same $4000 of college tuition costs eighteen years ago now cost $16,000 currently.
For private universities, an independent Section 529 plan may work as well. However, there are different plans in different states. They all have different performance history. You may not have to select a 529 plan from the same state that you plan to have your child attend college in that state. Therefore you can generally select one state’s 529 plan and have the child attend college in another state – without being restricted to attend college in that same state. Section 529 plans do not generally lock in tuition at current costs like the Florida Prepaid Plans, but they do allow to save tax-free toward college and university tuitions until used for those purposes. The amount available for these costs can also depend on the performance of the investments held by the 529 plan.
The Florida prepaid plan comparatively is only for Florida public universities in the State of Florida. However, current plan terms allow contributions to be returned without penalty or applied to another child if the first child does not later attend a Florida public college or university.
For more information on the Florida Prepaid College Program and its terms – which can change over time and based on when a child is first entered into the plan – please visit www.myfloridaprepaid.com
Read the full story on the Miami Herald website: http://www.miamiherald.com/business/personal-finance/story/1286862.html