Those who purchased a prepaid college plan since 2008 will soon see a refund or a lower monthly payment.
The reduction is possible because lawmakers stopped university boards' power to impose 15-percent-a-year tuition hikes. As a result, purchasing a new plan after October will be significantly cheaper.
Florida Prepaid plans are considered risk free, but if you cancel the plan, you don’t receive any interest. Some advisers said other types of investment plans are a better deal for the money.
As state funding for colleges dried up during the recession, each university was allowed to raise their local or differential tuition up to 15 percent a year. The move doubled the cost of a prepaid plan.
But with that vote, the board that oversees prepaid costs returned to the 2007 level. The board’s chairman called the move historic.
"When you reduce the price to the families in Florida from $55,000 down to $27,000 for a four-year contract, that’s historical," Chairman Duane Ottenstroer said.
Families with a plan don’t have to do anything; they will hear in late September if they are getting a refund or a reduced rate. Executive Director Kevin Thompson said college will now be more affordable.
"The people who want to buy in the future will be buying at much lower prices -- almost 50 percent less for our most popular plans," Thompson said.
And for students like biochemistry junior Abby Cullen, prepaid has made all the difference.
"It meant that I could come to college, so it’s really important for me to have it," Cullen said.
When enrollment opens in October, the price for a newborn will be half of what it was last year. Also in October, the board is rolling out a new plan. Families will be able to buy just one year of college for as low as $45 a month.
"You, as the parents, can take on a year," said a spokesperson for the prepaid program, Shannon Colavecchio. "Maybe grandma and grandpa take on a year, maybe a favorite aunt and uncle take on a year."
Lower payments will show up in September's billing. Refund checks will go in the mail in late October.