The price of a four-year Florida Prepaid college tuition plan is going down.
The plan is down to $35,000 from $54,000 after a new law passed the state legislature just a couple of months ago. Now, families will pay $250 per month instead of $350.
"Affordability is an issue for our families," said Albert Collazo, Florida Prepaid spokesman.
To Casandra Perez, the Florida Prepaid Plan is worth it. Like many parents, Perez and her husband opened a Florida Prepaid account to pay for their 2-year-old daughter Eva's college education before she was even born.
They said they chose to place $250 per month into a Prepaid plan over opening a private 529 investment plan because they feel more secure with it.
"Knowing that the 529 basically goes with how the economy's doing, we didn't want to risk it, just in case," Perez said. "We're dead set on having money aside, no matter what happens otherwise in our lives."
But is Florida's Prepaid program the best option to save for college? Financial adviser Sebastian Guerra said private investment accounts are better. Although there's more risk, Guerra said, they can earn a higher investment return and they don't restrict children to Florida schools.
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"How many of them decide not to go to school at all or get accepted to a great school like Harvard?" Guerra said. "Those things are limited once you choose one of these paths."
Guerra said that if families put equal amounts into a Florida Prepaid account and a mutual fund that earns an average return, the mutual fund investment would be worth about $90,000 over 18 years.
Student Daniel Amador said he learned about the limitations of the Florida Prepaid Plan after a year at the University of West Virginia. He returned to South Florida to study at Florida International University because the Prepaid Plan takes care of his bills at the state university.
"I don't have that constant pressure of having to work one, maybe two jobs just to be able to pay for rent or for books or anything else related to school," Amador said.
One undeniable advantage of the Florida Prepaid Plan is that it guarantees that families pay today's tuition rates, even if a child isn't going to college for another 17 years, when the cost of four years of tuition at a state school is expected to be about $78,000.
"We're just happy that it's locking in today's rate, because we know obviously that prices are going to go up," Perez said.
