Is your state prepaid tuition plan flawed?
MichiganProgram name: Michigan Education Trust (MET)
Cost/Benefit: A family signing up for one year of the Full Benefits contract for a ninth-grader (lump sum option with payment due with application) will pay $12,800 or $427.00 per credit hour. The Full Benefits contract is appropriate for the student who intends to enroll at one of the more expensive Michigan public universities (tuition for 2009-10 at the University of Michigan is $11,659 for lower-division students and $13,141 for upper-division students). The Limited Benefits contract costs substantially less -- $10,310 for a year or $343.67 per credit hour -- but caps the payout at 105 percent of the weighted average tuition at Michigan publics. According to MET's Web site the weighted average tuition in 2009-10 of Michigan's four-year public institutions is $9,372 or $302.27 per credit hour.
MississippiProgram name: Mississippi Prepaid Affordable College Tuition (MPACT) Program
Cost/Benefit: A family that signs up for one year of the University Plan for a ninth-grader (lump sum payment option due Feb.1, 2010) will pay $5,161 for up to 32 credit hours or $161.28 per credit hour. The 2009-10 weighted average tuition for Mississippi universities covered by this plan is $154.59 per credit hour.
NevadaProgram name: Nevada Prepaid Tuition Program
Cost/Benefit: A family that signs up for one year of the University Plan for a ninth-grader (lump sum payment option due May 15, 2010) will pay $5,237 or $174.57 per credit hour. The 2009-10 tuition at the University of Nevada is $136.00 per credit hour.
PennsylvaniaProgram name: Pennsylvania Guaranteed Savings Plan
Cost/Benefit: The tuition credits purchased through this plan are redeemable for an amount equal to average tuition at schools within one of five categories. The participant selects the category, either:
- The PA State System of Higher Education.
- PA State-related Universities.
- PA Community Colleges.
- Ivy League Colleges.
- Private Four-Year Colleges.
A family selecting the first or third categories will pay a price for their tuition credits equal to current average tuition at those institutions; a family selecting the second category will pay a price for their tuition credits 8 percent above current average tuition at State-related Universities; and a family selecting the fourth or fifth categories will pay a price for their tuition credits 2 percent above current average tuition at those institutions. Participants in this plan are also charged an annual account-maintenance fee equal to 0.49 percent ($4.90 on each $1,000 of value).
TennesseeProgram name: Tennessee's BEST Prepaid College Tuition Plan
Cost/Benefit: Each unit acquired in this plan is worth 1 percent of the weighted average tuition at Tennessee's public four-year universities and may be redeemed for use at any eligible educational institution in the country. The per-unit price is $72.52 per unit as of Jan. 1, 2010. The per-unit payout value for the 2009-10 school year is $61.20 per unit.