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What does it mean to “lock in” the cost of college?


You’ve probably heard that when you purchase a Florida Prepaid plan, you “lock in” the cost of college and your Plan price. That is true, but what does it really mean?

Like with many questions, there’s a simple answer and a more detailed answer. The simple answer is our favorite, because it feels good to say and it’s even better to hear. “Locking in” your Plan price is college-tuition-speak for “set it and forget it.” Simply put, if you make all your payments, the state of Florida guarantees your Plan. It means letting go of the worry about whether you’ll be able to afford tuition. Less calculating and less stress!

But we’re happy to peel back the curtain and give the full explanation. First, let’s talk about what “locking in” Plan prices is not. It is not locking in today’s tuition rates for tomorrow’s use. Rather, it is our team of financial experts predicting what tomorrow’s tuition will be and what must be paid today to get parents there, factoring in how investments may grow over time. This allows families to lock in their Plan price – once you select your payment option that amount will never go up.

Your student has 10 years from their projected college enrollment date to use their plan benefits. By purchasing a plan for a newborn, you are able to lock in the college tuition and fee costs for the next 28 years!

Florida Prepaid Plan prices are actuarially determined. They take into consideration current tuition and fee rates, tuition inflation and investment yields. Did you know that the price you pay for your Florida Prepaid Plan is less than what college is expected to cost in the future? When we receive a payment on your Plan, we invest the funds to earn the additional monies necessary to pay for future college costs.

Some parents choose to invest on their own outside of a Prepaid Plan, and that’s OK — but it is not the same. What those parents don’t have is a guarantee. Will those investments grow enough to cover tuition costs when their child is in college? How can the parents be sure? Because of Florida’s guarantee, Prepaid Plan parents rest easy.

Nationally, college tuition rates have continued to rise significantly, leading to the ever-growing student loan debt crisis of more than $1.5 trillion. There are some things you cannot control, like the cost of food and college textbooks, however when you lock in your Plan price with Florida Prepaid, you are immune to tuition increases, and you can even add an optional university dormitory plan as well. When your student is ready for college, the plan pays the actual costs even if the cost of college tuition and fees is higher than anticipated when your Plan prices were set. It is one of the main advantages of a Prepaid Plan.

Remember, with Florida Prepaid, you cannot lose money on your investment. Our calculator allows you to input your child’s birthdate and immediately see what our variety of plans cost and what each plan is estimated to eventually be worth. We also have an extensive FAQ for our Prepaid plans, to answer any other question you may have.

Have questions? We’ve got answers! Explore our Frequently Asked Questions to learn more about our Prepaid Plans and Savings Plan. And click here to start your savings now!

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