What happens if the beneficiary graduates early from high school or takes college courses before high school graduation?
The Texas Guaranteed Tuition Plan provides for the use of prepaid tuition benefits to beneficiaries that use their funds earlier than their projected high school graduation year. The Plan must be notified that the beneficiary is either graduating early or using the contract benefits while still attending high school. In order to use your benefits while still in high school, a Dual Enrollment Form [PDF] must be submitted. To utilize the Plan to pay the tuition and fees prior to the beneficiary’s graduation from high school, the account must be paid in full including any outstanding fees.
Do admissions standards still apply if I have a prepaid tuition contract?
Yes. The Texas Guaranteed Tuition Plan does not guarantee that students will be accepted by any college or university. Applicants must still meet all the admissions requirements, and be accepted by the school they wish to attend.
What do I do when my beneficiary reaches college age?
When the beneficiary graduates from high school and is accepted at a college or university, the contract becomes redeemable if it is paid in full. In the spring of their senior year in high school, beneficiaries are sent a first time in college packet. This packet contains student identification cards, a student handbook, and an Intent to Enroll in an Out-of-State College or University form [PDF]. In most cases the college or university will invoice the Plan for tuition and required fees on behalf of the beneficiary. The beneficiary or purchaser is responsible for familiarizing themselves with the school’s third party billing process (invoicing the Texas Guaranteed Tuition Plan), verifying each term their Texas Guaranteed Tuition Plan credit is applied, and paying any additional charges not covered by the Plan.
What if the beneficiary decides to attend college out-of-state?
If the beneficiary plans to go to school outside Texas, an Intent to Enroll in an Out-of-State College or University form [PDF] should be submitted to our office 60 days in advance of enrollment. After we receive the form, a third-party bill letter is sent to the school. The letter will contain billing instructions and the amount the Plan will pay per credit hour on behalf of the beneficiary. The amount paid will not exceed actual tuition and required fee charges or the average rate of tuition and fees in Texas for the current academic year under the selected Plan type. The Plan will pay the college after receipt of an invoice. If the out-of-state school refuses to bill the Plan, the purchaser or beneficiary can send us their fee statement as an invoice. There is a $25 processing fee deducted from the payment to the out-of-state-school for each term funds are disbursed on behalf of the beneficiary.
What if the beneficiary doesn’t use all of the hours on the contract?
The purchaser may receive a refund on the unused portion of the contract. If the beneficiary is 18 or has graduated from high school, the refund will consist of contributions paid by the purchaser plus earnings based on the rate of tuition inflation for the plan type over the life of the contract, minus fees (a $25 cancellation fee and a $3 monthly administrative fee for installment contracts or a $20 one-time fee for lump-sum contracts). No earnings are paid if the beneficiary has not graduated from high school or is under the age of 18.
Beneficiaries have 10 years after the beneficiary's projected high school graduation date to use Plan benefits. Unused credit hours also can be applied to a graduate or professional degree within the 10-year period. Time spent in active-duty military service extends the 10-year period. The contract will automatically terminate 10 years after the beneficiary's projected high school graduation date and the purchaser will receive a refund based on contributions paid minus fees.