Is The Texas Tuition Promise Fund for You?
The Texas Tuition Promise Fund (Plan) offers many advantages:
- Benefits are tax free when used to pay tuition and required fees
- Today’s prices pay for tomorrow’s education at most Texas public colleges and universities (excluding medical and dental schools, health science centers and other health-related institutions).
- Flexible options for every budget
- Benefits are transferrable to another eligible Beneficiary
- Tuition is locked in – but you’re not
Earnings are Tax Free
You Can Get More Out of Your Money
The Texas Higher Education Coordinating Board reports that tuition costs in Texas on average rose 72% from 2003-2009. Buy Tuition Units now at today’s prices that can be redeemed at mot two- and four-year Texas public colleges and universities (excluding medical and dental schools, health science centers and other health-related institutions) when your Beneficiary is ready for college and don’t worry about future tuition increases.
Flexible Options and Payment Plans for any Budget
Tuition Is Locked In – But You’re Not
If your Beneficiary doesn’t go to college or need all the units, you have several options:
- Do a Rollover of the Transfer Value to a 529 college savings plan so that the money can be used for graduate school, books or room and board
- Change the Beneficiary of the contract to a current member of Beneficiary’s family, or the new Beneficiary must be a Texas resident or the child of a parent who is both the Purchaser and a Texas Resident.
- Request a refund and withdraw the Refund Value of unused Tuition Units that have met the three-year holding period requirement or the Reduced Refund Value for units held less than three years. The earnings portion of a Refund, if any, is subject to the actuarial soundness of the Plan and is subject to federal income taxes plus a 10% federal tax as well as any state or local taxes that may appy. Refund Value does not include any state-provided or procured matching contributions or earnings thereon.
If your Beneficiary attends a Texas private school, career school, out-of-state school, medical or dental school, health science center or other health-related institution where tuition and fees are not locked in, you can apply the Transfer Value towards the cost of tuition and required fees.
If tuition inflation continues, the earlier you start, the less expensive it will be to purchase a Plan and lock in tuition and required fees at today’s prices at Texas public colleges and universities.
Cost of Type I Tuition Units Compared to Potential Future College Costs For One Year of Tuition
For Illustrative Purposes Only