Prepaid college programs??

[Skylarr29]

Has anyone enrolled in a pre paid college program for your child/children? If so which one and why? My son is only 11 weeks but I want to start a program now. Would it be better to just start a regular savings account? Thanks!!!!

 

[minkydog]

My sister lives in Alabama and they have some kind of pre-paid program there that covers any public school in the state. Her oldest child used through 3.5 years of college(unfortunately, he's barely a sophomore due to poor choices and a bout with type 1 diabetes.) His money will be running out soon, which might be just as well. Sometimes when kids don't have a stake in the game, they don't take college very seriously. It's a lot different when you're having to work 2 jobs to pay your own way.

Anyway...I think it's a great idea to start saving now so you don't have to come up with 1000s three months after they graduate HS.

 

[Jason@dvcstore]

Has anyone enrolled in a pre paid college program for your child/children? If so which one and why? My son is only 11 weeks but I want to start a program now. Would it be better to just start a regular savings account? Thanks!!!!

Our first son was born 9/15/09 so we are going through the same decisions right now. We have come to the conclusion that we are going to do the 529 plan.

http://cashmoneylife.com/2009/03/11/college-savings-plans-529-vs-coverdell-esa/

Jason

 

[Magic Mom]

We did Florida's prepaid college program. I'm so happy we did. DS started school this year and when it was time to pay his tuition, he just handed them his card and that was it.

 

[momof1princess]

whichever college savings plan you choose, please research it thoroughly. the alabama PACT (prepaid alabama college tuition) plan was heavily invested in the stock market and has lost so much money, that even an emergency bailout by the state will only carry it through the next 5 years. yes, i'm an alabama resident and no, i don't have a PACT plan-DH and i couldn't afford it at the time, and now i'm kind of glad, because parents who bought plans are having to protest at the state capital to try to get their children's college tuition paid.

 

[lillygator]

we have teh Fl prepaid for both girls - 4 yr Univ. We plan on not telling them about it, good grades are a must and hopefully they will get some scholarships as well.

we also have 529 plans for both.

 

[hinodis]

I do not recommend it. The child's choice for school is limited. Here in Michigan they have to go to a public school in Michigan. Both my kids are in a private college in another state. They chose schools that best matched their major and personal preference. I have a friend that did it and neither one of her kids went to college. You really have NO idea what the future holds for your child. I am sure you can save another way for them, so that they will have choices when they are ready. Congratulations on the birth of your baby!

 

[lillygator]

in FL, you can get your money back (w/ no interest) but we felt it was best for us, we locked in 2002 and 2005 tuition rates and since then, they state univ (at least UF) was raised 8% at one point in the past year or so I think.

 

[Longsx3]

We bought DD(13) a prepaid plan for FL. In 1999 I think we paid 7000 for 4yrs Univ. and fees...the plan today would cost about 28K. At the time my brother argued for us to invest in stocks instead, we are glad we did not do that!


A PP also mention not sharing with their DD that they have PP. DD has known for a longtime that she has the program, we have provided the means now she has to put forth the effort.

 

[golfgal]

We bought DD(13) a prepaid plan for FL. In 1999 I think we paid 7000 for 4yrs Univ. and fees...the plan today would cost about 28K. At the time my brother argued for us to invest in stocks instead, we are glad we did not do that!


A PP also mention not sharing with their DD that they have PP. DD has known for a longtime that she has the program, we have provided the means now she has to put forth the effort.

Well, your brother was probably right, even with the hit last year you would have had a lot more money in that account then $28K because with college so close you would have moved that money into very conservative accounts and you would not have had much of a hit at all.

Prepaid plans are money makers for the college systems. They get all the profits and if your child ends up not going to a state university, you are out the money.

If you want to have a "college savings account" 529 plan is the way to go. I still think there are better options with less restrictions and the same tax advantages.

 

[The Mystery Machine]

My dd is a college freshman and we do not have any "plan". I don't recommend that.

I would have to say after going thru the college process I would never buy into a "state plan".

Tons of college kids go out of state.

Not to mention the fact if you move somewhere else, now you are really in a bind I would think.

I would pick something flexible and portable.

 

[wfloyd]

The Florida plan is very flexible. If you go to a school out of state, you get the amount of money that would have been used at an instate school. Granted it may not cover all of the out of state tuition but it would help.

Also if you move out of state, I am pretty sure you can go to a Florida college and get instate rates. With tuition rates here going up 15% a year, it is a pretty good investment.

 

[Skylarr29]

The Florida plan is very flexible. If you go to a school out of state, you get the amount of money that would have been used at an instate school. Granted it may not cover all of the out of state tuition but it would help.

Also if you move out of state, I am pretty sure you can go to a Florida college and get instate rates. With tuition rates here going up 15% a year, it is a pretty good investment.

Yes, this is true. We do live in Florida and I think this is the way we are going to go. Also, like you said we can get our money back. We will probably invest in other ways too for additional costs etc.

 

[Longsx3]

Well, your brother was probably right, even with the hit last year you would have had a lot more money in that account then $28K because with college so close you would have moved that money into very conservative accounts and you would not have had much of a hit at all.

Prepaid plans are money makers for the college systems. They get all the profits and if your child ends up not going to a state university, you are out the money.

If you want to have a "college savings account" 529 plan is the way to go. I still think there are better options with less restrictions and the same tax advantages.

I disagree, 28K is the cost now...I do not believe I would have quadrupled our money in the 10yrs since I bought the plan and that doesn't take into account the actual cost of College in another 5yrs. Florida is in the process of raising tution to be inline with the national avg, I am glad we did Prepaid!

 

[BibbidiBobbidiBOO]

The Florida Prepay is great. I do think it is different than a lot of states prepay. It is financially guaranteed so you can't lose your money and is refundable.

We got DS's and DD's 4 yr locked in at 1999 rates. DS is using his now and it is wonderful. He just uses his card to pay his tuition and fees. DD will use hers in 4 years. We did have stocks invested for this too, but kept those for our self. Glad we do not have to cash them in now for him.

Florida also offers Bright Future Scholarships which can be combined with prepay to pay other fees.