Saving for college doesn’t have to be stressful. College savings plans help families nationwide save for their children’s future college education. In Florida, parents can choose to save through a unique program, the Florida Prepaid College Plan.
What is the Florida Prepaid College Plan?
The Florida Prepaid College Plan is the oldest prepaid tuition plan in the country. It lets you lock in college plan prices and prepay your kid’s college tuition at any public college or university in Florida.
The State of Florida guarantees the money, so you will never lose what you put into it. A fully funded plan wholly covers the costs of tuition (and dormitory fees if eligible) even if the cost of tuition rises higher than anticipated by the time your child attends college. It’s a safe, low-risk investment in your child’s future.
You can choose from five different plans, depending on your budget/where you want your child to go:
- 2-Year Florida College Plan: Covers tuition and fees a two-year AA degree from a Florida College
- 4-Year Florida College Plan: Covers tuition and fees for your kid to earn a bachelor’s degree from a Florida College
- 2+2 Florida Plan: Covers tuition and fees for a bachelor’s degree with two years of courses at a Florida College and then two years at a Florida University
- 1-Year Florida University Plan: Covers tuition and fees for one year at a Florida University
- 4-Year Florida University Plan: Covers tuition and fees for a bachelor’s degree at a Florida University
If your child decides to follow a different path through the Florida College System, don’t worry. You can use the funds saved for any of the plans. Selecting a plan from the start just ensures you’re saving enough. For example, money saved under the two-year plan can be used to cover costs at a Florida University. You’ll just have to pay the tuition difference.
If your child decides to attend a private school or an out-of-state school, you can even transfer the value of your plan to eligible institutions—you won’t lose out on the money you put in. Funds can also be transferred to another child, used to cover grad school, or refunded if your child doesn’t go to college.
How Does the Florida Prepaid College Plan Work?
Assuming your child stays within the Florida College System, the plan works like this:
- Select one of the five plans
- Pay the $50 application fee to open a plan
- Choose a payment plan—Monthly, 5-Year, or Lump Sum
- Fully pay off the plan amount
- Your child applies to the Florida schools of their choosing
- The school will bill Florida Prepaid directly each semester for tuition and dormitory fees (if applicable)
- Receive any leftover funds after accounting for any scholarship money your child receives
How Much Does the Florida Prepaid College Plan Cost?
How much you’ll pay depends on a few things:
- Open enrollment rates
- Your child’s age
- The type of plan you want
- The payment plan you choose
Open Enrollment Rates
Open enrollment runs from February 1 to April 30. Plan rates change each year based on current tuition and fee rates, tuition inflation, and investment yields. Regardless of how rates change, the price you pay is always less than the predicted cost of college. The plan makes up the difference by investing the money paid into the plan. You get a higher value than what you put in, which is what makes this plan worth it for many families.
Numbers used below reflect the 2019 rates.
Your Child’s Age
The younger your child, the more manageable your monthly payments. For example, the two-year plan for a one-year-old costs approximately $57 per month. The same plan for a 15-year-old costs approximately $194 per month.
The Type of Plan
Parents opting for the Two-Year Florida College Plan pay much less than parents who choose the Four-Year Florida University Plan. Plans for a newborn start at:
- 2-Year Florida College Plan: $55.42/month
- 4-Year Florida College Plan: $119.61/month
- 2 + 2 Florida Plan: $149.45/month
- 1-Year Florida University Plan: $46.61/month
- 4-Year Florida University Plan: $186.28/month
If desired, you can add on a Dormitory Plan to the last three plans. Dormitory Plans start at $47.89 per month.
Your Payment Plan
Choose between a monthly, five-year, or lump sum payment plan. The lump sum payment offers the best deal since there is no interest fee applied. For example, the lump sum payment for the 4-Year Florida University Plan for a newborn is around $29,000. The five-year plan ends up totaling around $34,000 and the monthly plan totals around $41,000.
Perks of the Florida Prepaid College Plan
Sure, you could prepay for your child’s education on your own, adding money to a savings account each month. But, by doing that, you’d be missing out on the many benefits of the Florida Prepaid College Plan:
- Even if the future cost of college rises more than anticipated, your plan still wholly covers tuition and eligible fees for your student. If the future cost of college is less than anticipated, you get a refund for the difference.
- The money is guaranteed by the State of Florida. You will never lose the money that you pay in, even if your child decides not to attend college.
- You won’t be tempted to spend the money intended for your child’s college on other things.
- You can sign up for automatic payroll deduction with participating employers, making it even more convenient to save.
- Friends and family can contribute to your child’s plan, knowing that their gift will go directly toward your child’s future.
Florida’s 529 Savings Plan
Florida also offers a more traditional college savings plan, the Florida 529 Savings Plan. The plan works like an investment account—your money rises and falls with the stock market. So, why not just invest in the stock market yourself? In a 529 plan, your money grows tax-free—assuming you use it for qualifying educational expenses.
Whether you’re investment savvy or a newbie, you can manage your own 529 plan. Choose between several portfolios and fund options. The most common option, the Age Based/Years to Enrollment Portfolio, is more aggressive for younger children and more conservative as your child nears college enrollment.
Learn about the other static portfolio options and investment fund options here.
Florida 529 Savings Plan vs. Florida Prepaid College Plan
Both plans help parents save for college, so how do you choose what’s right for your family?
First, let’s compare the two plans.
With the Florida 529 Savings Plan:
- You can enroll your child at any age or grade
- Any U.S. resident can enroll
- You don’t have to commit to a set payment structure. Just contribute what you can when you can.
- You can use the funds to cover qualified K-12 expenses and/or higher education tuition, fees, housing, books, and supplies at any qualified public or private institution.
- You accept a higher risk because your money isn’t guaranteed.
With the Florida Prepaid College Plan:
- You can only enroll a newborn through 11th grader
- To enroll, the child or their legal guardian must be a Florida resident for at least the past 12 months
- You are committing to contribute a set amount toward your child’s education, which can make saving for your child’s future easier.
- You face less risk because you are guaranteed what you’re paying into the plan even if actual costs rise higher than anticipated.
Which Florida College Plan is Right for My Family?
It all depends. What works for your family might not work for your neighbors. Read through the specifics of both plans and review your finances before making any decisions. Consider your income, job stability, your willingness to accept risk, the number of children you have, your kids’ ages, and your educational preferences.
For example, if you have a stable job, solid income, and do not want to assume a lot of risk, the Florida Prepaid College Plan is a good option. Just choose a plan type and payment plan you can afford.
If you are unsure about what you want for your kids, but you want to at least start saving something, the Florida College Savings Plan might be right for you. How much you put in is completely up to you.
For many families, using both plans makes sense. The Florida Prepaid College Plan can cover tuition costs and the Florida 529 Savings Plan can help cover additional expenses like a computer, books, supplies, and housing.
Want to learn about all your college saving and college financing options? Click here.
Compare the Best Student Loan Refinance Rates
Here are our top student loan refinance picks for 2019
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Student Debt Relief Loan Refinancing Advertiser Disclosure
College Ave: College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
College Ave Refi Education loans are not currently available to residents of Maine.
1 – The 0.25% auto-pay interest rate reduction applies as long as the borrower or cosigner, if applicable, enrolls in auto-pay and authorizes our loan servicer to automatically deduct your monthly payments from a valid bank account via Automated Clearing House (“ACH”). The rate reduction applies for as long as the monthly payment amount is successfully deducted from the designated bank account and is suspended during periods of forbearance and certain deferments. Variable rates may increase after consummation.
2 – $5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees. Information advertised valid as of 04/26/2019. Variable interest rates may increase after consummation.
3 – This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
ELFI: Subject to credit approval. Terms and conditions apply. To qualify for refinancing or student loans consolidation through ELFI, you must have at least $15,000 in student loan debt and must have earned a bachelor’s degree or higher from an approved post-secondary institution.
LendKey: Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
CommonBond: Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate.
Splash Financial: Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval.com
Earnest: To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest’s fixed-rate loan rates range from 3.89% APR (with autopay) to 7.89% APR (with autopay). Variable rate loan rates range from 2.50% APR (with autopay) to 7.27% APR (with autopay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms of 10 years or less. For loan terms of 10 to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 0.26% and 5.03% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 23, 2019 and are subject to change based on market conditions and borrower eligibility.
Auto Pay Discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/23/19. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice.
Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 303 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, e-mail us at email@example.com, or call 888-601-2801 for more information on our student loan refinance product.