Are Florida College Prepaid Plans a Good Investment?
written by: Robin L.•edited by: Wendy Finn•updated: 12/2/2011
We all know that thinking about long-term goals today can make it easier to afford them later, especially when it comes to saving for your child's college fund. The prepaid plans from Florida College do sound really appealing, but what are you getting and is it worth your investment?
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With the various concerns about the economy, many people are worried only about today and not thinking about how they will afford to send their child to college in two to eighteen years. If there is currently only enough money in the family budget to afford necessities then this is perfectly reasonable. However, if there is extra money available the Florida Prepaid College Plan offers an excellent opportunity for parents to save money for their child’s college education in an almost painless way.
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What's the Plan?
There are a number of different plans available such as the 4 Year University Tuition Plan, Community College Plan, as well as a number of additional plans to pay for things such as dormitory housing and local fees. For the sake of simplicity I will focus on the most popular plan, the 4 Year University Tuition Plan.
This Plan allows the parent, guardian, or other concerned party to begin paying for these fees now and lock today’s college prices in. In addition, the overall fee is lower than if one were to go to college today because the money will have time to grow before the child actually goes to college. For a child born before Sept of 2008 the one-time fee to pay for all credit hours at any public college in Florida, and other selected colleges out of state, would be a little over $14,000. Separate plans allow you to add tuition differential plans for $4,000.00, prepaid local fee plan for $3,240, and a four-year dormitory plan for $20,700 for a grand total of about $42,000. A college education in the year 2026 at a Florida Public University is $180,000. This adds up to a clear saving of nearly $140,000.
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Yes, that sounds fantastic but it does not cover all costs. There are still fees for textbooks, food, and miscellaneous items the student might need. Nevertheless, the savings is tremendous. There is no risk that the money will not be available as the Florida State Legislature is backing the endeavor.
Still, it is a lot of money. Fortunately, plans can be paid all at once, monthly until the child enters college, or monthly for five years. In addition, parents do not have to pay for all of the plans. Paying just for the tuition is an option with the other plan or plans added later.
Overall, the answer is yes. Yes, Florida Prepaid College Plans are a good investment if you have room in your budget for them. There are tax benefits and clear long-term savings.