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Florida Prepaid Founder Fights Tuition Increase

February 26th, 2009 by flanews

The founder of Florida’s Prepaid College Plan is fighting a proposal to allow all state universities to increase tuition 15 percent a year. The fear is that the increase could make the prepaid plan too expensive for Florida families. As Whitney Ray tells us, families who locked in rates before July 2007 don’t have to worry about increases, but people shopping for a prepaid plan will be paying more.

Hear it Here: Florida Prepaid Founder Fights Tuition Increase

Jennifer Meale bought a Florida Prepaid College Plan for her daughter Ivey at the beginning of 2007. Months later the state gave five universities permission to raise tuition 15 percent a year.

“I think we missed it by about six months and we’re locked into the rate we signed up for in the plan,” said Meale.

Right now, universities that charge a differential tuition above the normal rate don’t receive any extra money from students on Florida’s Prepaid Plans. The University System’s Board of Governors voted to allow state colleges to collect those lost dollars from the Prepaid Plan. The plan still needs legislative approval.

“The University System will in fact be getting as much as three billion dollars over the next 24 year that Prepaid doesn’t have to give them under the current arrangement, but the contract holder, not one dime more out of contract holders,” said BOG Spokesman Bill Edmonds.

But people buying a plan after the 2007 cutoff date have to buy an extra plan to cover the differential tuition increases. A proposal to allow all 11 state colleges to raise tuition rates 15 percent a year could make prepaid plans unaffordable for some families.

Jennifer Meale said if the plans get more expensive, she would consider buying a lesser plan for any future kids.

“We may only do half if we have more kids, but we may get it for everyone, so we’ll have to look at it when we have more kids,” said Jennifer.

The proposed increase comes as enrollment in the plan is down 15 percent. The Prepaid College Board refused our request for an interview to talk about how the proposed 15 percent increase would change the price of their plans.

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