A prepaid tuition plan allows families to buy future tuition credits at current prices; if you buy shares worth one semester’s tuition when your child is young, those shares should always be worth one semester’s tuition regardless of how much rates rise.
Many states have ended their plans or changed them as their budget deficits grew. Facing shortfalls, some states bumped up prices by charging larger premiums above the cost of current tuition. And some available plans don’t offer guarantees.
College financing experts quoted in the article tell parents and students to review the specifics of their state’s plan carefully. But advocates of the tuition plans call them “peace of mind programs” and say they still offer that comfort.
Speak with your estate planning attorney to see if this or another strategy is recommended for your specific circumstances.
