With tuition rising at alarming rates and student debt surpassing credit card debt in the U.S., it is imperative for families to plan now for their children’s future college expenses, said Florida Prepaid College Board Chairman Duane Ottenstroer.
Tallahassee, FL (PRWEB) September 05, 2012
With the cost of higher education increasing across the nation, Florida Governor Rick Scott and the Florida Prepaid College Board urge families to research college savings options during College Savings Month this September.
“Tuition costs at Florida’s public universities have risen 71 percent in the past five years. That is an unacceptable increase. While we focus on an affordable, high-quality education, it is also important for families to plan ahead, and participating in a college savings plan is a great way to do that,” said Governor Rick Scott. “Investing in a prepaid plan is a smart way to invest in your children’s future because there is no greater gift than the gift of education.”
Surveys consistently show parents using 529 college savings plans, tax-sheltered college savings tools, are more successful savers than those who do not use these plans. The Florida Prepaid Board offers two college savings plan options: the Florida Prepaid College Plans and the Florida College Investment Plan. Open enrollment to lock in this year’s prepaid plan prices starts October 17, 2012.
Recent figures from a joint report released by the Consumer Financial Protection Bureau and the U.S. Department of Education provide new estimates for total outstanding student loan debt in the United States, which topped more than $1 trillion in 2011.
“With tuition rising at alarming rates and student debt surpassing credit card debt in the U.S., it is imperative for families to plan now for their children’s future college expenses. Purchasing a Florida Prepaid Plan or Florida College Investment Plan allows families to prepare for the future, giving them the flexibility to select a plan that fits their budget, and help their children avoid the burden of college debt faced by many recent graduates,” said Florida Prepaid College Board Chairman Duane Ottenstroer.
In the last decade, cost for tuition and fees for in-state students at four-year public institutions has increased at an average rate of 5.6 percent per year, reports the College Board. Now is the perfect time to take advantage of simple and smart ways to save for higher education.
The Florida Prepaid College Board dispels some common myths surrounding college savings below:
Myth: If our family leaves Florida, then the money in a Florida Prepaid College Plan can’t be used at colleges in other states.
Fact: The full value of a Florida Prepaid College Plan, what would be paid to a Florida public university or Florida college, can be transferred to most out-of-state or private colleges.
Myth: If my child receives a Florida Bright Futures Scholarship, it would be a waste of money to have purchased a Florida Prepaid College Plan.
Fact: Bright Futures no longer covers the full cost of tuition and fees. Most students who have both a Prepaid College Plan and Bright Futures are able to more fully cover the costs of college because the two can be used together. In addition, all students are not academically eligible for Bright Futures, and they must maintain a certain GPA in college to keep the scholarship.
Myth: Having a tax-free 529 college savings plan, like the Florida College Investment Plan, will significantly affect my child's eligibility to receive financial aid.
Fact: Section 529 college savings plans are considered assets of the account owner, not the beneficiary, so there is a low impact on a student’s financial aid eligibility.
Myth: I lose control over the assets in my Florida Prepaid College Plans if my child does not attend college.
Fact: If the beneficiary of either the Prepaid College Plan or a Florida College Investment Plan decides not to attend college, the plan may be transferred to another member of the beneficiary’s family. Or, families can receive full refunds.
Myth: There’s no need to purchase a 529 college savings plan since my family could just save monthly for a college education without one.
Fact: 529 plans, like Florida’s Prepaid College Plan and Florida College Investment Plan, are tax-free under the federal Internal Revenue Code, which means the earnings will not be taxed as long as the money is spent on college-related costs.
Additionally, the Florida Prepaid College Plan is financially guaranteed by the State of Florida*, dispelling concern for loss of investment with refunds available at any time, for any reason. The state guarantees plans will cover all promised tuition, housing or fees at the time a student attends college.
More information on Florida Prepaid College Plans is available at http://www.myfloridaprepaid.com or by calling 1-800-552-GRAD (4723).
*The Florida Prepaid College Board does not provide tax or investment advice regarding its Prepaid College Plan or its College Investment Plan. The Florida Prepaid College Plan may not cover certain imposed fees by state universities and state colleges. The Florida College Investment Plan is subject to market conditions.
Please carefully review the Disclosure Statement and Participation Agreement and consult with your advisor(s) about risks before investing in your child’s education.