Texas law requires all Texas two- or four-year public colleges and universities to accept Texas Tuition Promise Fund® Tuition Units as payment for the applicable portion of tuition and required fees.
Your Beneficiary will be treated as a Texas resident for the portion of the tuition and required fees covered by the Plan even if he or she lives out-of-state at the time of enrollment. Any portion not paid for by the redemption of Tuition Units must be paid at the school’s then-current tuition rate based on the then-current residency status of the Beneficiary.
Assets in your account are not considered in determining eligibility for Texas state-funded financial aid.
Two Texas 529 Plans
Texas offers two types of 529 Plans – prepaid and savings. The prepaid tuition plan covers only tuition and required fees. The savings plans can be used to pay qualified educational costs not covered by the prepaid plan such as books, lab fees, and room and board.
You have the flexibility to choose one type of plan or combine both plans into a program designed to work best for your future graduate.
Each plan offers several investment and payment options to fit your needs.
1. The Texas Tuition Promise Fund® is a Texas prepaid plan that allows Texans to lock in tomorrow’s Texas public tuition and required fees at today’s prices.
The Plan offers:
- An opportunity to prepay all or part of tuition and required fees for a college education at a Texas two- or four-year Texas public colleges and universities at today’s rates.
- A chance to start saving for a college education from a child’s birth.
- The flexibility to be used for private and out-of-state colleges and universities or career schools too. 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.
- The flexibility to change 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.
2. The Texas College Savings Plan® is a 529 college savings plan administered by the state of Texas that offers a flexible and tax-advantaged way to save for a child’s college education, including tuition, fees, room and board, and textbooks. The Plan’s benefits include:
- A choice of savings options, including 20 different investment portfolios;
- Any earnings grow tax free; and
- Withdrawals are tax-free as long as the withdrawal is used for Qualified Higher Education Expenses, including certain books, room and board (subject to limits), and other qualified expenses.
Finally, the LoneStar 529 Plan® is a college savings plan for those who want the advice of an investment professional. Please note that a purchase through an investment representative will incur additional fees.