Today, the Prepaid College Board unanimously ratified the agreement between the Florida Board of Governors and the Prepaid College Board. This action follows the unanimous approval by the Board of Governors on February 26, 2009.
The agreement provides that all families that own a Prepaid Plan as of the date the agreement takes effect will receive the full benefits of their plan. The agreement also assures that the state university system will receive predictable and reliable payments for the delivery of a quality education to Prepaid Plan students.
In order to become effective, the Florida Legislature must pass legislation authorizing the Prepaid College Board to make the agreed upon payments to each university. The legislation must subsequently be signed into law by Governor Charlie Crist. It is important to note that the information presented below will not become effective unless the Legislature passes the agreement.
As we have previously informed you, in 2007 the State University System was authorized to charge a supplemental fee to a student for instruction provided by a research-level state university. This supplemental fee is commonly known as the "Tuition Differential Fee." Once fully phased-in, the fee cannot exceed 40% of the regular tuition rate established by the Legislature. Through the efforts of the Prepaid College Board, the Governor and the Legislature agreed to exempt all families that owned a university tuition plan at the time from having to pay this fee. Under this agreement, if you purchased your university tuition plan during the 2007 enrollment period or earlier, you will not be assessed the tuition differential fee when your child attends college.
Immediately following the authorization of the tuition differential fee, the Prepaid College Board created a way for new customers to prepay the cost of this fee by offering a tuition differential fee plan at an added cost to the regular university tuition plan. To date, close to 18,000 families have purchased a tuition differential fee plan. Universities will accept the Board's payment, as payment in-full, for students that have a tuition differential fee plan, no matter how much the actual fee may be at the time the student attends college. Under this agreement, if you purchased a university tuition plan after the 2007 enrollment period and also purchased a tuition differential fee plan, you will not be charged any additional amounts for these fees when your child attends college.
Families who purchased a university tuition plan after 2007, but did not purchase the supplemental tuition differential fee plan, will have to pay the tuition differential fee when their child attends college. Under this agreement, there is no change in this policy. If you purchased a university tuition plan during the 2008 or the 2009 enrollment periods and did not purchase the supplemental tuition differential fee plan, you will have to pay the fee if your child attends a state university. The amount of this fee may vary based on each institution.
The Florida Prepaid College Board believes that this agreement protects the families that invested in their children's educational future by purchasing a prepaid plan, and will help the state university system achieve excellence in today's competitive academic environment. Importantly, the agreement will also allow the Prepaid College Board to continue to offer families an affordable means to save for their children's future college expenses. The Prepaid Board looks forward to securing the support of Governor Crist and the Legislature for this important agreement.
The Florida Prepaid College Board manages the Florida Prepaid College Plan and the Florida College Investment Plan. Both are tax-free 529 college savings plans authorized by Section 529 of the Internal Revenue Code.
The Board provides Florida families with affordable, tax-free ways to save for college and has 20 years of experience in managing 529 plans.
The Florida Prepaid College Plan was first sold in 1988, and since then, more than 880,000 children have been enrolled, and nearly 1.3 million Prepaid College Plans have been purchased to cover tuition, local fees, dormitory housing and the new tuition differential fee at state universities and community colleges. The full value of the plan can be transferred to private and out-of-state colleges. The Florida Prepaid College Plan is the largest, most successful prepaid college plan in the nation.
The Florida College Investment Plan provides families with a second option to save tax-free for college, and includes an array of investment options and the ability to save for tuition, fees, room and board, textbooks and supplies for use at accredited colleges nationwide.
Board meetings are held quarterly.
Upcoming meetings:
June 9, 2010
September 8, 2010
December 8, 2010
Section 529 - The Florida Prepaid College Plan and the Florida College Investment Plan are both 529 plans authorized by Section 529 of the Internal Revenue Code.
Florida Statutes - The Florida Prepaid College Board, the Florida Prepaid College Plan and the Florida College Investment Plan are governed by Florida Statutes.
Florida Administrative Rules - The policies for the Florida Prepaid College Plan and the Florida College Investment Plan are described in the Florida Administrative Rules.
Comprehensive Investment Plan - There is a separate Comprehensive Investment Plan describing the investment goals, strategies, asset allocation and performance benchmarks for both the Florida Prepaid College Plan and the Florida College Investment Plan.