By Maxine Shapiro, KERA 90.1 commentator
Dallas, TX – So you're thinking that the stock market is not where you want to be investing for your child's college tuition. You might be right, you might be wrong. There is a viable alternative. It's called the Texas Tomorrow Fund. I'm Maxine Shapiro with KERA Marketplace Middays.
How would you like to pay for tomorrow's college education at today's prices? That's exactly what the Texas Tomorrow Fund does. Imagine really not worrying about your child's education. It's shocking to think that since 1985, college tuitions have gone up 460% - while family incomes have only increased a quarter of that.
Now according the good people at the Texas Tomorrow Fund, a student entering a public university this year will pay estimated $15,500 in tuition and required fees over four years. When your newborn enters college, it's expected to reach over $60,000.
So how does this pre-paid tuition fund work? Based on array of contracts to choose from, you simply make monthly or yearly payments until the education is paid for. For example, to finance a newborn who can't wait to enter a public university, you would only have to pay $35 month for the next eighteen years. Obviously, there's a small fee for the monthly convenience.
That might sound outrageous to some, but to others who don't want to handle the ups and downs of the market, or whose financial future might be unstable, this is a perfect way to lock in a child's education. Unlike most other forms of investment, this is constitutionally guaranteed by the state. Or if Susie or Juan wants to go to Oklahoma State, this fund is reciprocal with all other states. It's fully refundable if they get a scholarship, or decide not to go to college and it's transferable. It does not cover room and board.
And it should not be confused with other states 529 college savings programs - something you might also want to look into. I was told that Texas' 529 programs should be ready to go later this year. The Texas Tomorrow Fund is worth the research. The deadline of May 24th is fast approaching. What better investment can we make then our child's education? For KERA Marketplace Middays, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 P.M.