Florida's Prepaid Plan turns 25
With more than 700,000 plans sold, sales are dropping due to increasing costs
Florida's Prepaid Plan has sold more than 700,000 plans in its 25-year history, but sales are dropping because of increasing costs.
This is a tale of two students. Douglas Futch of Fort Lauderdale will graduate debt-free.
"Yeah, my parents were in a position to take the Florida Prepaid, I'm very fortunate and I don't think I'll be in any debt," said Futch.
But Karla Jiminez of Dania Beach expects to own $30,000 by the time she finishes grad school.
"Twenty grand for undergrad, and more for grad school," said Jiminez. "Yeah, it's not fun."
One in 10 Florida children currently have prepaid college plans. Prepaid has been averaging about 40,000 plan sales a year, but rising costs have cut that number in half, that worries the plan's founder, Stanley Tait.
"We've got to take care of the low and moderate income families," said Tait. "They represent the biggest population in this state."
At its beginning, Prepaid was costing a newborn's parents $15 a month.
The cost of a prepaid plan today is $51,000 for a newborn. That's up a whopping $10,000 in just three years.
Gov. Rick Scott, who has vetoed tuition increases in the past, said the plans are now out of reach for many parents.
"Very few families are going to be able to afford this," said Scott.
The answers, say advocates, is for lawmakers to put more cash into universities instead of raising tuition.
"The low-income families can't afford their kids to go to college, that's the end of the story of a higher education for the state of Florida," said Tait.
This past fall, 105,000 students who either entered a college or university entered with a prepaid scholarship.
The Prepaid Plan itself is not in danger. It currently has 10 billion in assets and is funded at more than 100 percent of its liabilities.
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