Florida Prepaid College Plans

Posted Sep 2, 2010 by Sherri Ackerman

Updated Sep 2, 2010 at 12:53 PM

This comes from Pasco education reporter Ronnie Blair:

As this year’s enrollment time approaches for the Florida Prepaid College Plans, the board that oversees the plans is trying to knock down a few myths it says circulate about how the whole thing works.

The board offers three plan options that allow parents to pay their child’s college tuition years in advance, locking in the costs at today’s prices. The enrollment period for this year’s plans begins Oct. 18.

Figuring out whether to opt for prepaying tuition, or investing in some other college savings program instead, can be a daunting task, especially for parents of a toddler who are trying to predict their child’s college plans years in advance. The good news, according to the Florida Prepaid College Board, is that parents don’t need psychic powers because it’s already figured into the plan that life takes unexpected twists.

Here, according to the board, are a few of the prepaid-tuition myths and the board’s response to them:

Myth: If our family leaves Florida, then the money in a Florida college savings plan can’t be used at colleges in other states.

Fact: The full value of a Florida Prepaid College Plan, what would be paid to a Florida public university or Florida college, can be transferred to most out-of-state colleges or private colleges.

Myth: If my child receives a Florida Bright Futures Scholarship, it would be a waste of money to have purchased a Florida Prepaid College Plan.

Fact: Starting last fall, Bright Futures no longer covers the full cost of tuition. Most students who have both a Prepaid College Plan and Bright Futures are able to more fully cover the costs of college because the two can be used together.  In addition, all students are not academically eligible for Bright Futures, and they must maintain a certain GPA in college to keep the scholarship.

Myth: I lose control over the assets in my Florida Prepaid College Plans if my child does not attend college.

Fact: If the beneficiary of either the Prepaid College Plan or College Investment Plan decides not to attend college, the plan may be transferred to another member of the beneficiary’s family. Or, families can receive full refunds.

Myth: Having a tax-free 529 college savings plan will significantly affect my child’s eligibility to receive financial aid.

Fact: Section 529 college savings plans are considered assets of the account owner, not the beneficiary, so there is a low impact on a student’s financial aid eligibility.