What is the Texas Guaranteed Tuition Plan?
Formerly known as the Texas Tomorrow Fund, it is a fund administered by the Texas Prepaid Higher Education Tuition Board that gives individuals the chance to prepay tomorrow's college tuition and required fees at Texas public and private colleges and universities at about what it would cost today. The Board invests these payments and will use the investment earnings to cover the full cost of college tuition and required fees at Texas public colleges and universities, or the estimated average private tuition and required fees at Texas private colleges and universities, for students enrolled in the program.
Who oversees the plan?
The Texas Prepaid Higher Education Tuition Board consists of seven members. The Board is chaired by the Texas Comptroller, two members appointed by the Governor and four members appointed by the Lt. Governor (the House Speaker submits the names of two persons to the Lt. Governor). By law, these board members must have experience in higher education, business or finance.
Selected Comptroller employees serve as staff to the Board.
Is the Texas Guaranteed Tuition Plan affiliated with Texas Guaranteed Student Loan Corporation?
No. Texas Guaranteed Student Loan Corporation, also known as "Texas Guaranteed" or "TG," administers the Federal Family Education Loan Program, a federally-sponsored program that provides low interest loans to students and their parents to pay for education beyond high school. TG also provides information, tools, and solutions to students, schools and lenders to help simplify the higher education loan process. It does not, however, have any role in the Texas Guaranteed Tuition Plan, a program of the Texas Prepaid Higher Education Tuition Board.
Exactly what does the Texas Guaranteed Tuition Plan cover?
A prepaid tuition contract can pay up to 160 credit hours of tuition and required fees for students at any public college or university or the estimated average private tuition and required fees for students at any private university. Required fees are those fees that are charged to all students as a condition of enrollment at a particular institution of higher education.
The Texas Guaranteed Tuition Plan does not cover room and board, transportation, books, laboratory fees or other fees required for specific courses.
The fund will pay the maximum number of credit hours listed below for the type of plan purchased:
- The junior college plan covers up to 64 credit hours of tuition and required fees
- The senior college plan and the private college plans can cover up to 160 credit hours of tuition and required fees
- The junior-senior college plan covers up to 64 credit hours at a community or technical college and up to 64 hours at a senior college or university, for 128 total credit hours of tuition and required fees.
It should be noted that some degrees require more credit hours than those paid for by a Texas Guaranteed Tuition Plan contract. Likewise, some degrees or courses require specific fees that are not covered by the Texas Guaranteed Tuition Plan. In both these cases, the student will be responsible for paying any additional amount due.
While some required fees are assessed on a credit hour basis, other required fees are assessed on a per semester basis. The fund will pay for two (2) semesters of fees assessed on a semester basis for each contract year purchased. For example, if a required fee is charged on a semester basis and the contract is for four years, the Texas Guaranteed Tuition Plan will pay this fee for eight (8) semesters. Half a fee term is deducted for each summer session. No fee term is deducted for mini sessions or multiple invoices paid in the same semester.
What are the required fees?
Required fees are the fees that a college charges as a condition of enrollment into the institution. In other words, the Texas Guaranteed Tuition Plan pays for the fees that every student must pay just to enroll at the university. This does not include course specific fees such as lab fees or any fees that are charged just to certain students in specified majors. For example, many colleges charge students fees based on what course of study they are pursuing; these fees would not be covered by the Fund because they are not charged to every student enrolling at the university.
Are individual accounts set up?
Records of individual participants and their payments are maintained for the purposes of (1) administering tuition payments when a student enters college; (2) tax reporting; and (3) refunds (if applicable). However, the Texas Guaranteed Tuition Plan is not an individual savings account. It is a fund that combines and invests the contributions paid by all participants.
Why should I prepay my child's tuition?
Although Texas' tuition and required fees are now at the national average, in recent years annual increases have ranged from 7.6% up to 23%. That's more than the rate of increase in the average family's household income and considerably higher than the interest rate paid on a passbook savings account, certificate of deposit, or other insured investment. By prepaying tuition and required fees through the Texas Guaranteed Tuition Plan, you don't have to worry about keeping up with tuition inflation: your future college student's tuition and required fees will be paid at a price locked in by your contract--no matter how much these costs skyrocket in the future.
Is the Plan protected or insured?
The 75th Texas Legislative Session passed HJR 8, which was taken to the voters of Texas on November 4, 1997. The constitutional amendment passed creating a constitutionally protected trust fund backed by the full faith and credit of the State of Texas. Future tuition and fee payments are guaranteed by the State.
How did this plan come about?
State lawmakers created the plan by passing House Bill 1214 in May 1995. Senator Gonzalo Barrientos, Representative Ted Kamel and Representative Richard Raymond were the sponsors of House Bill 1214. The program began in January 1996.
What administrative fees are charged?
Schedule of Administrative Fees:
|Type of Fee||Amount||Description|
|Application||$50.00||nonrefundable fee, used to cover processing of applications|
|Benefits Transfer||$25.00||assessed when funds are used for out-of-state tuition|
|Change of Beneficiary||$50.00||assessed to re-calculate the benefits because of age and revised costs at time of enrollment, account set-up|
|Plan Conversion||$50.00||assessed to re-calculate benefits when converting from one plan to another|
|Change in Purchaser||$20.00||assessed for transfer of contract rights and obligations to another purchaser|
|Late Fee||$10.00||assessed on each monthly payment received past due date|
|Termination||$25.00||assessed upon termination of a contract by purchaser or Board|
|Insufficient Funds||$20.00||assessed for all payments returned for insufficient funds|
|Changes in Payment Schedule||$15.00||assessed for changes in the payment schedule requested by the purchaser|
|Account Maintenance||$3.00/monthly||servicing of accounts, account status, statements (included in contract installment payments)|
|Account Maintenance||$20.00/lump sum||one-time only assessment for servicing of accounts, account status, statements (included in lump sum contract price)|
|Account Reinstatement||$25.00||assessed when an account is reinstated|
What are the actuarial assumptions of the Texas Guaranteed Tuition Plan?
The program actuaries perform a detailed actuarial analysis of the program each year. This analysis is used to make sure that the fund is financially sound, and to set contract prices for each annual enrollment period. The actuarial assumptions are adjusted each year to reflect changes in tuition and fee rates, investment earnings and other relevant factors.
How can I correspond with the state office of the program?
To send a letter to the state office of the program, write to:
Texas Guaranteed Tuition Plan
Comptroller of Public Accounts
P.O. Box 13407
Austin, TX 78711-3407
Central Services Building
1711 San Jacinto Blvd, Room 202
Austin, TX 78701
Phone Number: 1-800-445-GRAD (4723), select option 2.
Fax Number: (512) 475-0081
Mail payments to:
Texas Guaranteed Tuition Plan
P.O. Box 12018
Austin, TX 78711-2018
What colleges and universities are covered by the four plans?
The Texas Guaranteed Tuition Plan is accepted at all accredited in-state and out-of-state public and private junior/community and senior colleges and universities, and Texas proprietary schools accredited by the Texas Higher Education Coordinating Board. You do not have to name a specific school when you buy a contract.
Is there a maximum on the amount of contributions to Texas administered 529 plans for a particular beneficiary?
Maximum Texas Program Limit-The current maximum contribution limit for a particular beneficiary in all Texas administered IRC Section 529 plans is $370,000. Texas administered 529 plans include the Texas Guaranteed Tuition Plan, the Texas College Savings Plan, the LoneStar 529 Plan, and the Texas Tuition Promise Fund. The limit may be changed from time to time by the Texas Prepaid Higher Education Tuition Board.
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