Published: 02-09-09
(AUSTIN) — Texas Comptroller Susan Combs reminds parents that the current enrollment period ends Feb. 28 for the Texas Tuition Promise Fund the state’s new prepaid college tuition program. Enrollment opened last September for the program which allows families to lock in college tuition and required fees at current prices of Texas public colleges and offers many flexible options to prepay those expenses before a child is ready for college.
“The Texas Tuition Promise Fund makes it easy to save for college even in these challenging economic times” Combs said. “If your child attends a Texas public college you don’t have to worry about the volatile stock market and you can prepay for as much of your child’s college costs as your family budget allows.”
During the current enrollment period more than 4800 children have been enrolled in the Texas Tuition Promise Fund. The contracts purchased are worth almost $100 million in future college tuition and required fees.
“You must enroll your child in the Texas Tuition Promise Fund by Feb. 28 to take advantage of current contract prices” Combs said. “When the current enrollment period ends enrollment will close until September except for newborns born in March through August. We will survey colleges and universities regarding their future tuition and fees and set new contract prices for the next Texas Tuition Promise Fund enrollment period.”
Families enrolled in the Texas Tuition Promise Fund purchase tuition “units” with three levels of pricing to prepay undergraduate resident tuition and required fees at schools ranging from public community colleges to four-year state universities. (A detailed explanation of prepaid tuition units is below.)
During the current enrollment period parents of a newborn can pay as little as $15.16 per month until their child’s high school graduation to prepay a year of tuition at a community college. Parents of a 7-year-old who want to prepay the weighted average cost of one year’s tuition at a four-year Texas public university could spread the payments over 10 years for $81.53 a month.
“The Texas Tuition Promise Fund allows families from any economic background to achieve their education goal — whether it is a four-year college degree or a training program at a community college to gain the technical skills that good well-paying jobs require” Combs said. “The U.S. Department of Education estimates about 80 percent of the fastest-growing job categories in the near future will require some education beyond high school but not a bachelor’s degree. Texas employers report a growing shortage of workers with technical skills needed for the jobs in Texas’ future.”
Combs’ Web site Every Chance Every Texan can help families plan and save for college. The Web site provides information on careers that will be in demand in the future and the education requirements for various fields. It also includes tools to help families calculate college costs and determine whether they are saving enough money. To learn more about the Texas Tuition Promise Fund visit www.EveryChanceEveryTexan.org or go directly to the Texas Tuition Promise fund Web site at www.TexasTuitionPromiseFund.com.
Summary of Texas Tuition Promise Fund
A family can buy “units” to prepay a student’s undergraduate resident tuition and required fees. There are three types of units (Type I Type II and Type III).
What units represent
• 100 units = One year of tuition and required fees (based on an academic year of 30 credit hours).
• 1 unit = 1 of a year’s tuition and required fees; 2 units = 2 of a year’s tuition and required fees…10 units = 10 of a year’s tuition and required fees etc.
• Families can buy any number or type of units up to the value of 600 Type I units of undergraduate tuition and required fees.
Cost of units
Type I units – Priced at undergraduate resident tuition and required fees at the most expensive Texas public four-year school at time of purchase. Current price = $98.50 per unit.
Type II units – Priced at weighted average cost of undergraduate resident tuition and required fees across all Texas public four-year schools at time of purchase. Current price = $67.65 per unit.
Type III units – Priced at weighted average cost of undergraduate resident tuition and required fees across all Texas public two-year schools at time of purchase. Current price = $16.99 per unit.
Redemption of units when student enters college
100 Type I units – Will cover one academic year’s undergraduate resident tuition and required fees (30 credit hours) at any Texas public four-year school.
100 Type II units – Will cover the weighted average cost at the time of college enrollment of one year’s undergraduate resident tuition and required fees at any Texas public four-year school. If a school’s tuition and required fees are above the weighted average cost the family has to either pay the difference or redeem additional units to make up the difference.
100 Type III units – Will cover the weighted average cost at the time of college enrollment of one year’s undergraduate resident tuition and required fees at any Texas public two-year school. If a school’s tuition and required fees are above the weighted average cost the family has to either pay the difference or redeem additional units to make up the difference.
Contracts could have unused Type I II or III units if a student attends lower cost schools. The value of unused units can be refunded or transferred to a 529 college savings plan or another beneficiary.
