Author Topic: Florida Prepaid College Tuition  (Read 1042 times)

FIT_Goat

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Florida Prepaid College Tuition
« on: September 14, 2017, 07:00:59 PM »
My sister and I had a big argument about this recently.

She is paying $575 a month for 55 months to lock in college tuition for her daughter (who is currently 1 year old).  If they do this, then my niece gets 4 years of tuition at today's costs.

I was trying to argue with my sister that she would probably be better off investing the money for the 17-18 years, and then having it available to spend on college.  My reasoning is that 575/mo @ 7% for 55 months, and then sitting for the rest of the time is nearly $90k.  She's paying 31.6k in today's money, betting that tuition and expenses will be greater than $90k by the time her daughter goes to college.  She will be able to get a refund, at the going rates, for the money when my niece is college age, if she doesn't go or doesn't need the money.

So, what do y'all think?  If this a fair deal?  College tuition seems to be rising at around 4-5% per year, so it's probably pretty close.  It's probably not a horrible mistake.  It isn't tax advantaged (neither is a 529), so I don't know that there's really any deciding factor there either.

tomorrowsomewherenew

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Re: Florida Prepaid College Tuition
« Reply #1 on: September 14, 2017, 08:06:04 PM »
Is this just for tuition or for tuition and room and board? I mean, UCF is only about $6,000 a year right now, unless I'm grossly mistaken.

FIT_Goat

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Re: Florida Prepaid College Tuition
« Reply #2 on: September 14, 2017, 09:09:50 PM »
There are several plans, I am not sure which one my sister is getting.  But, I suspect it is tuition and room and board, but I am not 100% sure.  It seems to be too much for just tuition, but not enough for tuition with room and board.  My sister has become pretty defensive about it, so there's little hope of getting elaboration at the very moment.