dcsimg
You are here:

Economic Crisis and the End of Prepaid College Tuition Plans

Just what we needed, more complications springing up from the steady rise of college tuition costs! This time, the problem is with a form of 529 investment plan called the pre-paid college tuition plan. The idea was that parents could put money into a trust fund, a little at a time over many years (like a 401K for students rather than retirement), and through the magic of savings and investment dividends could have their child's college tuition paid off in full before they even entered freshman year. Unfortunately, thanks to a gap created by rising tuition and falling stock market value, that full-paid tuition is no longer such a sure thing.

The rising cost of college and plunging stock market have combined to create a disparity between what some of the 18 states' prepaid tuition plans have on the books and what they're supposed to pay. The worst case is in Alabama, where the sour economy has sliced off nearly half of the fund's assets, and state officials are telling parents the full cost of college isn't a sure thing.

The board overseeing the plan there is scrambling after assets lost 48 percent of their value since September 2007, and they currently have only about half of what they need to pay what families are expecting. Unless the market shifts quickly or the plan receives an infusion of cash, it would run out of money after nine more years of paying full tuition. The plan could also reduce payments to families.

Eighteen states offer this program, but not all are feeling the effects of a downturned economy to the same degree. Seven states are still backing their plans despite tighter times, but others are reeling from losses and lack of coverage--Alabama, Tennessee, South Carolina, West Virginia, and Washington being among the worst-off. According to Tennessee's assistant Treasurer Steve Curry, the problem could be easily reversed through either state budget money or a dramatic upturn in the stock market. So far, these have yet to happen. In the meantime, student loans loom on the horizon for many students and parents who thought for years that tuition was in the bag.

Search Schools

      
Matching School Ads
  • MPH@UNC

    MPH@UNC is the online Master of Public Health (MPH) program from the University of North Carolina’s Gillings School of Global Public Health, which is ranked the No. 1 public school of public health and No. 2 school of public health on U.S. News’ list, most recently published in 2015. The program offers a Leadership in Practice concentration and can be completed on a full-time or part-time basis. GRE, GMAT or MCAT scores are required.

    Programs

    • Master of Public Health

    Location: Online

    MPH@UNC Request Info »
  • Animal Behavior College

    At Animal Behavior College (ABC), we're dedicated to helping animal lovers pursue animal careers. 

    Programs

    • Veterinary Assistant

    Location: Online

    Animal Behavior College Request Info »
  • Loyola University New Orleans Online

    Take control of your future with education and innovation. Loyola University New Orleans offers three CCNE-accredited online nursing programs—RN-BSN, MSN, and DNP—as well as a variety of career concentrations so you can align your education to your professional interests.

    Programs

    • MSN - Nursing Leadership
    • RN to Bachelor of Science in Nursing (BSN)
    • RN to MSN Bridge Program
    • More...
    Location:
    New Orleans: 6363 St. Charles Avenue, New Orleans LA 70118
    Loyola University New Orleans Online Request Info »
  • Washington State University

    Get your career started with training from Washington State University.

    Programs

    • Executive MBA
    • MBA
    Location:
    Pullman: , Pullman WA
    Washington State University Request Info »
  • Pepperdine University - Psychology

    Pepperdine University offers its Master of Arts in Psychology program online, enabling students across the country to receive a Pepperdine graduate education without attending classes on campus. The online master’s in psychology program provides a comprehensive overview of psychology and allows students to develop the skills needed to assess personality and intelligence and treat mental and emotional disorders.

    Programs

    • Master of Arts in Psychology

    Location: Online

    Pepperdine University - Psychology Request Info »
  • Intercoast Colleges

    Get your career started with Intercoast Colleges.

    Programs

    • Mental Health Rehabilitation Technician
    • AAS Degree in Business Office Administration
    • Associates in Applied Science Degree in Substance Abuse Counseling
    • More...

    Location: Online

    Intercoast Colleges Request Info »
  • Ultimate Medical Academy Online

    Ultimate Medical Academy is a nonprofit healthcare career school—and students are at the heart of everything we do. That’s why we offer exclusive student services through your career training and beyond, beginning from the time you enroll online or at our campus in Clearwater, FL. We’ll also guide you toward the right program for your goals, and help you understand the affordability of your career training. So let us know you’re interested, and we’ll discuss how UMA can help you succeed.

     

    Gainful employment information can be found at UltimateMedical.edu/gainful-employment and includes information on tuition, loan debt, completion, placement, and occupations.

    Programs

    • A.S. - Healthcare Information Technology
    • Diploma - Medical Administrative Assistant
    • A.S.- Health Sciences (Pharmacy Technician)
    • More...

    Location: Online

    Ultimate Medical Academy Online Request Info »
  • Anna Maria College

    Anna Maria College is a private, not-for-profit, Catholic liberal arts institution accredited by the New England Association of Schools and Colleges. Founded by the Sisters of Saint Anne in 1946, AMC's programs integrate liberal education and professional preparation that reflect the respect for liberal arts and sciences education grounded in the traditions of the Sisters of Saint Anne—educational innovation, service to others, and access to a quality education for all.

    Programs

    • Bachelor of Science in Fire Science
    • Master of Public Administration - Fire and Emergency Services
    • Master of Public Administration - Homeland Security
    • More...

    Location: Online

    Anna Maria College Request Info »
  • University of Maryland at College Park

    Study online with University of Maryland at College Park.

    Programs

    • MBA - Information Systems & Business Analytics
    • MBA - General
    • MBA - Marketing
    • More...
    Location:
    College Park: , College Park MD 20742
    University of Maryland at College Park Request Info »
  • Argosy University

    Argosy University offers doctoral, master's, and bachelor's degree programs to students through its eight colleges.

    Programs

    • Psychology (BA) (Online)
    • Business Administration - Accounting (BS) (Online)
    • Business Administration - Healthcare Management (BS) (Online)
    • More...
    Location:
    Phoenix: 2233 West Dunlap Ave., Phoenix AZ 85021
    Argosy University Request Info »
  • Matching School Ads

    Quick School Search

    College & Career Search Tools

    • Careers: Unsure about your career path? Study profiles of hundreds of professions.

    • Interviews: Professors and deans sit down with our team to give you unique insights on college life.

    • Military Education: Find only Military friendly online schools and campuses.

    • Student Reviews: Know before you go. Read student reviews on over 2000 accredited colleges. Write your own experience.