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.
About The University of Texas at Arlington
- M.Ed. In Curriculum and Instruction - Mathematics Education
- Master of Science in Nursing - Pediatric Acute Care Nurse Practitioner
- M.Ed. In Curriculum and Instruction - Science Education More...
- AA - Healthcare Information Technology
- Diploma - Massage
- AA - Paralegal Studies More...
- Veterinary Assistant
- Certified Dog Trainer Instructor Course
- Grooming Instruction
Work toward your graduate degree with New England College Online.
- Master of Science in Accounting - Forensic Accounting
- MS in Management/Project Management
- Master of Science in Accounting More...
About University of North Carolina Wilmington
To meet today’s high demand for nursing professionals UNCW is offering an accredited Bachelor of Science in Nursing program completely online.
- MSN Nurse Educator
- RN to BSN
Change the World with American University
Be a part of something bigger than yourself.
- Master of Science in Measurement & Evaluation
- Master of Science in Nutrition Education
- Master of Arts in Economics - Applied Economics More...
- Associate of Arts in Business - Business Management
- Bachelor of Arts in Business - Organizational Leadership
- Master of Arts in Ministry - Practical Theology More...
Established in 1897, Bradley University is a private, independent institution of higher learning in Peoria, Illinois. Inspired by our founder, notable philanthropist Lydia Moss Bradley, we pursue excellence in teaching, research, scholarship and service; and we celebrate leadership, integrity, diversity and collaborative learning.
- Online Doctor of Nursing Practice - Leadership Track (MSN to DNP)
- Online Master of Science in Nursing (BSN to MSN-FNP)
- Online Master of Arts in Counseling - Clinical Mental Health Counseling (CMHC) More...
Why Choose Widener University?
At Widener University, we proudly cultivate challenging and culturally diverse learning environments where academics, leadership, and service come first. Our curricula are connected to societal issues and challenge students to take social responsibility for their role in today's global society.
- Masters of Social Work