What is the Texas Tuition Promise Fund?
The Texas Tuition Promise Fund is designed to help families and individuals prepay for all or some future tuition and required fees at any two- or four-year Texas public college or university. Account holders purchase Tuition Units, which represent a fixed amount of undergraduate resident tuition and required fees charged by Texas public colleges and universities. The number of units needed varies depending on the school, but generally 100 units represents 30 semester hours, which is considered to be one academic year.
Who can open an account?
Any U.S. citizen or legal resident 18 years and older can open an account, as long as the Beneficiary is a Texas resident. If the child is not a Texas resident, a parent must be the Purchaser and a resident of Texas. Charities that award scholarships may also open an account.
Where can I use the units?
Tuition units can be used at any two- or four-year Texas public college or university. If your child attends a private or out-of-state college or career school where tuition and fees are not locked in, you can apply the Transfer Value of your units toward the cost of tuition and required fees. If your needs change, you can also switch the Beneficiary to another member of the Beneficiary’s family or request a refund. The new Beneficiary must be a Texas resident or the child of a parent who is both the Purchaser and a Texas Resident.
When can I enroll?
You may enroll in the Plan any time between Sept. 1 and Feb. 28 (Feb. 29 in leap years). Newborns can be enrolled through July 31 each year. Tuition rates are subject to change at the start of each Enrollment Period on Sept. 1. There is a three-year holding period before any units can be redeemed and the Tuition Units must be paid in full prior to redemption.
Why is this a good deal?
Texas law requires all Texas two-year and four-year public colleges and universities to accept the Plan as payment for the applicable portion of tuition and required fees. If your Beneficiary uses the units to attend a Texas public college or university, market fluctuations will not affect the future value of those Tuition Units. Prices start around $20 for a Type III unit. Tuition rose 72% at Texas public schools from 2003-2009, so you can avoid any future tuition hikes at those schools by locking in tuition and required fees at today’s prices. The Plan also offers federal tax benefits and flexible payment options. And even though family and friends can help you save, you – the account holder – have sole control over the account, including how the units are used.
How can I get started?
You can enroll online or you can mail in an application. First decide what plan is best for your needs and budget, what tuition unit types you’d like to buy and how you’d like to pay for the units. The Pricing Guide and Calculator are useful tools in comparing unit prices and redemption values.
To enroll, you should first read the Plan Description and Master Agreement and then gather some basic information about yourself and your Beneficiary, including Social Security number and birth date. Enrollment takes as little as 15 minutes and, after a $25 enrollment fee and the purchase of one unit, future contributions can be as little as $15.
About the Plan
The Plan does not pay for graduate school, room and board, transportation, books, or laboratory fees, fees that are not school-wide required fees, or such as fees required for a specific course. You might consider supplementing the Plan with a Texas College Savings Plan account that could be used for those costs.
Established by the State of Texas
The Plan is offered by the Texas Prepaid Higher Education Tuition Board. OFI Private Investments Inc., a subsidiary of OppenheimerFunds Inc., is the plan manager.
You should read the Plan Description and Master Agreement before enrolling in the Plan.