Florida Prepaid College Plans will increase in price about 5 percent this year, but they’re still a lot cheaper than a few years ago.
Open enrollment for prepaid plans begins Oct. 15 and will run through Feb. 29. The plans allow parents or others to pay all or part of a child’s Florida college education years in advance.
This year, the most popular four-year university plan will cost $28,894 for a newborn, up from last year’s $27,379. If you’d rather pay monthly, the cost is $183, up from $173 a month.
The same plan in 2013 cost $53,729, or $350 a month.
Another option available is the 2 plus 2, which covers two years in a state or community college and two at a university. This cost $22,838 or $144 a month for an infant. Two years ago, that same plan cost nearly $36,000.
The prices dropped dramatically last year because of a change in state law. Between 2009 and 2013, Florida allowed public universities to raise tuition by as much as 15 percent every year. The price of Prepaid plans skyrocketed based on the anticipated cost of numerous years of hefty tuition increases.
But the Legislature last year limited future tuition increases to 6 percent a year and as a result prices plummeted and the number of plans sold tripled.
About 50,000 plan holders who bought when prices were higher were given refunds last year or their payments have been reduced. Anyone who believes they are still owed a refund should contact Customer Service at 1-800-552-4723.
Prepaid plans for state colleges have been more stable in price in recent years because these schools were never authorized to increase tuition by large amounts. The four-year state college plan this year is $18,145 or $115 a month, and a two-year state college plan costs $8,406 or $53 a month.
Last year, Prepaid began a new option, allowing families to buy only one year of university tuition. The cost this year is $7,229 lump sum or $45.69 a month, which covers 30 credit hours. Families can later add additional years, although the price may be higher.
“Saving early really is the best way to save for college.” Prepaid Executive Director Kevin Thompson said.
The price of one type of plan can be applied toward another. For example, if a parent buys a four-year state college plan, but the student goes to a four-year university instead, the state college plan could be used to pay about two thirds of the cost. The value of the plan can also be used to defray costs at private or out-of-state colleges.
For more information, visit www.myfloridaprepaid.com.
Stravis@sunsentinel.com or 561-243-6637
