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Texas Tuition Promise Fund – a good deal

Posted by Texas Education on September 18, 2008

From chron.com. At a time when Americans remain deeply worried about the faltering economy and their own financial situation, the new Texas Tuition Promise Fund, which opened Wednesday, is good news for parents. As college tuition costs continue to spiral upward, the fund can help bring a measure of stability and predictability to planning for children’s college years.

The fund allows families to lock in tuition and required fees at current prices at Texas’ public colleges and universities. It offers an array of flexible options to prepay those expenses before a child begins college.

Yes, the plan is a great deal more costly than was the Texas Tomorrow Fund, a similar prepaid tuition program that closed to new enrollments in 2003, the year state lawmakers deregulated college tuition. Immediately, the cost of state colleges skyrocketed, with an average 70 percent tuition increase in University of Texas system schools. And while the cost of higher education at a Texas university remains a bargain compared to the cost of private institutions and flagship public universities in some other states, families can still use all the help they can get in paying for four years of college.

The new Promise Fund is geared to families in that economic sour spot where incomes are too high to qualify for need-based financial aid but too low to afford all out-of-pocket expenses. Texas Comptroller Susan Combs calls the fund an “exciting, flexible way to save for college.” It will, she says, enable families “to pre-pay for a four-year degree, or you can prepay in small bites for just a few classes or a few semesters. And best of all, you don’t have to worry about future tuition increases, because you lock in current prices.”

Three levels of pricing are offered to advance pay undergraduate tuition at schools ranging from public community colleges to four-year state universities. An attractive feature of the plan is that funds also may be used at out-of-state or private universities, with students and their families paying the difference in cost.

Families can find information describing the fund in detail at http://www.EveryChanceEveryTexan.org, along with information about other college savings plans, called 529s, which are an option to prepaid plans covering only tuition and required fees. Funds in 529 plans can be spent on tuition and fees, room and board and related expenses.

Parents should start early to research their options and figure out which is the best plan for their student. No matter which choice parents make, it is important they start the process early and are careful not to underestimate total costs.

It’s a scary and expensive proposition, putting a child through college. But the rewards, both both for the student and society, make it one of the best investments a parent can make. Plans such as the Promise Fund are valuable tools to aid in that effort.

Likewise, Texas lawmakers and taxpayers must recognize the value of supporting the next generation of homegrown Texas talent and ingenuity. Texas residents need more large-scale, effective measures to help middle-class parents provide their children with a college education. If Texas is to prevail in an increasingly competitive and complex world, it will find innovative ways to help families get their kids through college — and without going bankrupt in the process.

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