Ever since the Texas officials suggested the tuition rates lock program last year, it has been getting popular. By enacting this policy more and more high school graduate will have a chance to go back to either two years colleges or four years colleges in Texas. People who enroll in this program do not have to worry about tuition hike in the future. State Comptroller Susan Combs hopes that this incentive will encourage more family to participate in this program.
The program was initially started in 1996, now has 119,000 active accounts. The state stopped adding more accounts in 2003 amid concern that the fund is not keeping pace with the tuition hike. Public universities and colleges whose tuition outpaces the fund will bear the cost difference for the participating students. Now, UT-Austin allocates $8 million dollars to overcome the budget shortfall. Kevin Deiters, director of the educational opportunities and investment division of the comptroller's office, believes that this gives incentive to keep colleges cost down.
I believe prepaid college tuition program is a very effective way in facilitating many middle class families to send their kids to colleges in the future. Last five years college tuition is increasing at the rate of 10 percentages. We can predict that the tuition rate in the future will be unaffordable for middle and poor economic group. Good colleges and universities will be just for rich people. Therefore, by freezing tuition at current price is very sensible way of putting the cost down. This program also encourages parents to take responsibilities of their children’s education.
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I have to agree with “Lone Star State Politics” article titled ‘Texas Promise Fund’. In her article Sarmila Bhatta makes a good point in that prepaid college tuition programs-like Texas Promise Fund-are a very effective way in facilitating many middle class families to send their kids to colleges in the future.
The Texas Tuition Promise Fund is a Section 529 prepaid tuition plan. It allows people to lock in the cost of undergraduate college tuition and required fees, protecting prospective students against future tuition inflation. Over the past decade public college costs have risen at an average rate of 6.9% per year and four-year private college costs have risen at an average rate of 5.8% per year, according to the College Board's "Trends in College Pricing 2008".
The Texas Tuition Promise Fund is geared toward attending four- and two-year public colleges in Texas; but, people can also use the tuition units you purchase to help pay tuition and required fees at most private or out-of-state colleges and universities. Because out-of-state and private colleges may be more expensive than in-state public colleges and universities, the value of beneficiaries’ units may not cover the total cost of tuition and required fees at such schools.
I think the Texas Legislation should be thinking of creating more prepaid tuition programs like Texas Tuition Promise Fund; or expanding this prepaid program even further by allowing, and covering the tuitions costs of students who are interested in studying abroad.
I guess I am still a little unsure about the "Promise" part of it. Who promises that your contributions will pay for your kids tuition?
The State is expressly not promising it because it got burnt in the last version of this fund.
This fund is managed by a private company and I suppose to a certain extent, the universities will make up for any shortfall. I hope so atleast.
Reading the terms and conditions, there are express statements about the possible loss of value of money invested etc etc.
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