MIAMI (CBS4) – Pay now or pay later?

We’re a week and counting until this year’s deadline to enroll in the states’ prepaid college plan.

Click Here to enroll.

Parents face a confusing number of options. Options that in the past have left some parents surprised that they hadn’t been saving enough.

Florida’s prepaid tuition plan looked pretty good to Tracy Deblasio and her Dania Beach family:

Back in 2007, they took out a four year plan for nephew Nicholas after thinking it would cover most of his college costs.

“Basically the way it was described to us at time was there was your base college plan and there was also separate from that, what they called the tuition differential fee,” said Deblasio.

The family was offered the option of paying a little extra to cover what they were told were minimal extra fees. They decided the extra cost wasn’t worth it since fees back then were so small. But a few years later, state lawmakers boosted tuition costs by increasing those extra “differential fees” a lot more than DeBlasio expected.

Today, differential fees add another $52 a credit to tuition costs or about an extra $16 hundred dollars a year to the cost of tuition at state universities.

“That part of it has skyrocketed, it’s astronomical at this point, it’s very, very discouraging when you think you’ve signed a contract and secured that and it’s a done deal when in fact the child’s now got to come with a substantial amount of money,” said DeBlasio.

F-I-U Associate Controller Izhar Haq said the state’s prepaid plan changed back in 2010 by adding more options for parents to fully cover all the growing differential charges at state universities.

“In student financials, I get a lot of complaints from parents who feel they were misled. Well now the parents would have to add that cost into the Florida pre-paid plan so you can buy now either tuition or tuition and differential,” said Haq.

Actual monthly costs for the state’s plan depend on how close to entering college a student may be.

Under current law, state colleges like Miami-Dade do not include differential fees; only Florida’s bigger universities like FSU are authorized to charge extra differentials.

The cheapest rates start when a student is signed up as an infant.

The deadline for this years’ enrollment is next week.

Some local students say it’s getting harder and harder every year to keep up with all the extra fees and charges authorized by the state and it’s almost impossible to afford to stay in school.

Milly Labrador, a pre-law student, said more and more classmates are dropping out of school because they can’t afford the extra costs.

“It’s too much because it makes it hard for students that really want to go to school, to go to school because some of us don’t have the means. Some parents can’t afford school,” said Labrador.

Financial aid specialists said they’re seeing an increasing number of students needing more help money to stay in school.

“I would personally say if there’s 10 of them, probably all 10 would need to subsidize the difference the pre-paid doesn’t pay,” said assistant aid director Adelfa UIkenye.

So what’s the best pre-paid plan for your family?

Coral Gables financial planner Lane Jones recommends buying the plan with the best coverage you can afford.

In some cases, he said a personal education account you set up yourself known as a “529 Savings Plan” can give you better control of your money.

“For those people looking to take a little less risk, the prepaid plan is probably a little better option. For those willing to shoulder investment risk, maybe the risk that tuition is going to go up a little more, a 529 Savings Plan may be a little bit better option,” said Jones.

Click Here form more information on 529 Savings Plan.

But doing it yourself also means a lot more work with your bank, financial planner or tax advisor.

“It can be a challenge especially knowing what 18 years from now may look like,” said Jones.

The states’ latest tuition plans range from about $50 to $300 a month depending on how many semesters and extra fees you pre-pay.

Which plan is right for you?

It turns out you can also buy a prepaid tuition plan from another state and use it here if it looks like a better deal. Your best advice for funding a college education may come from your tax specialist, accountant or local banker.


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