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Reasons to Prepay


There are two good reasons to select a prepaid plan to save for college.

1. Offer Substantial Savings

  • Prepaying tuition and required fees at Texas public colleges and universities with the Texas Tuition Promise Fund (the Plan) gives students the gift of a college education and provides a buffer against those rising costs.
  • Since every family’s situation is different, we designed our Plan to let you choose the right approach for your child from among a range of college goals and payment plans.
  • Every contract with us has one thing in common: the earlier you start, the easier it will be to accomplish your student’s educational savings goals and increase your savings by locking in today’s lower prices at Texas public colleges and universities.

2. Offer Peace of Mind

  • Prepaid plans are not an investment and do not depend on ups and downs of the market if used to pay undergraduate resident tuition and required fees at Texas public colleges and universities.
  • Purchasers can change the Benficiary:  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. or cancel the account for 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. . Limitations apply so read the Plan Description and Master Agreement carefully before purchasing a plan.

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