Once in a while, the government acts in the best interests of its citizens. On the rare occasions that this happens, we like to bring it to everyone’s attention. Governor Ron DeSantis recently announced that they are lowering rates on all of the Florida Prepaid College Savings Plans. This announcement is slated to save Floridians $1.3 Billion in college costs, including refunds of about $500 million to existing customers. This is truly great news for our Florida families.
In addition to the refunds, new and existing plan prices are being reduced, and existing plans may be paid off earlier than anticipated with he price reductions. These changes are the result of lower than anticipated increases in tuition and fees.
This is not the first time the plans costs have been lowered. In 2014, Governor Rick Scott dramatically lowered the price of all plans. Some plans were cut nearly 50%, going from $40,000 down to $20,000 per student in some cases.
Florida, as well as many other states, offers a 529 college savings plan in addition to the prepaid plan. The 529 plan is a way to save money for education expenses which grows tax-free (like a Roth IRA) until you use it. As long as the money is used for education-related expenses, the growth is never taxed. The Prepaid Plan is also purchased with after-tax dollars, but the benefit of that plan is that you are paying today’s tuition rates for college in the future. Both plans have great benefits, and many people use them in tandem with each other.
If you want more information about these college savings options, please call our office at 904.685.1505 during normal working hours and we would be happy to discuss college savings strategies with you.