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IMPORTANT NOTICE: The Texas Tuition Promise Fund is established and maintained by the Texas Prepaid Higher Education Tuition Board. The Texas Sunset Advisory Commission performs periodic reviews of most state agencies. The Commission is currently reviewing the mission and performance of the Board. For information on how to provide comments or suggestions to Sunset staff on the Board’s mission, operations or services, please click here.


Using Your Units


Tuition UnitsTuition Units
Tuition Units are the unit of measure used to purchase prepaid tuition. Generally, one unit represents one percent of the cost of tuition and required fees for 30 semester hours at the school that most closely matches the unit’s pricing structure.
can be redeemed at any two- or four-year Texas public college or university for the applicable portion of tuition and required fees.required fees
Required fees are only those that must be paid by all students as a condition of enrollment in the college or university. They do not include course-specific fees such as equipment usage or lab fees, or fees related to your major or year of study.

If your child attends a private or out-of-state college, medical or dental school, health science center, other health-related institution or career school where tuition and fees are not locked in, you can apply the Transfer ValueTransfer Value
Transfer value is limited to the lesser of: 1) the costs the unit would cover at a Texas public college; or, 2) the price paid for the unit, plus or minus the Plan’s net investment earnings or losses on that amount. Transfer value does not include any state-provided or procured matching contributions or earnings thereon.
of your units towards the costs of tuition and required fees.

The Plan does not pay for room and board, transportation, books, or fees that are not required fees.

The “ required feesrequired fees
Required fees are only those that must be paid by all students as a condition of enrollment in the college or university. They do not include course-specific fees such as equipment usage or lab fees, or fees related to your major or year of study.
” covered by the Tuition Units do not include course specific fees, such as equipment usage, laboratory fees, fees related to your major or year of study, or any optional fees. The PurchaserPurchaser
The person who establishes the Contract for a specified Beneficiary. There can only be one Purchaser for each Contract. The Purchaser is responsible for making payments in a timely manner and is the only person who may direct or receive refunds, or may direct rollovers, Contract changes, and changes in the designated Beneficiary except that the Contract may be cancelled or modified by the Plan. Friends and family who contribute to another person’s account are not the Purchaser and may not prevent, direct or receive refunds, and may not direct rollovers, contract changes, or changes in the designated Beneficiary.
or BeneficiaryBeneficiary
The person designated by the Purchaser under a Prepaid Tuition Contract as the person for whom undergraduate tuition and required fees will be paid to an Eligible Educational Institution when authorized by the Purchaser.
is responsible for paying fees not covered by the Plan.

If your Beneficiary attends a career school, Texas private college, or any eligible out-of-state college, where the tuition and required fees are not locked in, you can apply the Transfer Value towards the cost of tuition and required fees. Transfer Value is limited to the lesser of (1) the costs the Tuition Unit would cover at a public in-state college or university or (2) the original purchase price of the Tuition Unit plus or minus the Plan’s net investment earnings or losses on that amount.

There is a three-year holding period before any units can be redeemed and the Tuition UnitsTuition Units
Tuition Units are the unit of measure used to purchase prepaid tuition. Generally, one unit represents one percent of the cost of tuition and required fees for 30 semester hours at the school that most closely matches the unit’s pricing structure.
must be paid in full prior to redemption.

A contract terminates automatically on the tenth anniversary of the date the Beneficiary was projected to graduate from high school. Time spent as an active duty member of the U.S. armed services is added to the ten-year limit. If there is a change of Beneficiary, the ten-year anniversary period is calculated based on the projected high school graduation date of the new Beneficiary.

If your needs change, you can also switch the BeneficiaryBeneficiary
The person designated by the Purchaser under a Prepaid Tuition Contract as the person for whom undergraduate tuition and required fees will be paid to an Eligible Educational Institution when authorized by the Purchaser.
to another member of Beneficiary’s familyMember of Beneficiary's Family
As defined by IRS Publication 970, the Beneficiary's family includes the Beneficiary's spouse and any of the following other relatives of the Beneficiary:
• Son, daughter, stepchild, foster child, adopted child, or a descendent of any of them. • Brother, sister, stepbrother, or stepsister.
• Father or mother or ancestor of either.
• Stepfather or stepmother.
• Son or daughter of a brother or sister.
• Brother or sister of father or mother.
• Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.
• The spouse of any individual listed above.
• First cousin.
The new Beneficiary must be a Texas resident or the child of a parent who is both the Purchaser and a Texas Resident.
or request a refund.request a refund
For all units held at least three years (and for contracts cancelled due to the Beneficiary’s death, disability, receipt of scholarship or admission to a U.S. Military Academy), the Purchaser will receive the Refund Value, which is an amount equal to the price you paid for the unit plus or minus adjusted net investment earnings or losses on that amount, with the earnings rate set annually by the Board at a rate that is up to 2% less than the actual net earnings, is capped at 5%, and is net of any fees due and payable. The earnings portion of a Refund is also subject to federal income taxes plus a 10% federal tax as well as any state or local taxes that may apply. Earnings may only be paid on a refund subject to the actuarial soundness of the fund. Refund Value does not include any state-provided or procured matching contributions or earnings thereon.

For units that do not meet the three-year holding period requirement, the Purchaser will receive the Reduced Refund Value. It will be limited to the lesser of (1) the price you paid for the unit, or (2) the price you paid for the unit, plus or minus net investment earnings or losses on that amount, and is net of any fees due and payable. This means the Reduced Refund Value will not include any positive net earnings, but can be less than the purchase price if there have been periods of negative returns in the market. Reduced Refund Value does not include any state-provided or procured matching contributions or earnings thereon.