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Prepaid Tuition- where does it go on FAFSA/CSS?

mimimomx3mimimomx3 Posts: 592Registered User Member
edited September 2012 in Financial Aid & Scholarships
I couldn't find the right spot to put the prepaid tuition plan we have in Texas. It's the Texas Tomorrow Fund, 4 years at a public Texas college. Any ideas? We included it in the 'explanation' box.
Post edited by mimimomx3 on

Replies to: Prepaid Tuition- where does it go on FAFSA/CSS?

  • onesonmomonesonmom Posts: 213Registered User Junior Member
    bump...
    We are facing this soon. Also, in the best-case scenario of a full scholarship, what becomes of the Texas Tomorrow Fund money? Also, if out-of-state, the college sends a bill to TTF for the (much higher) out of state tuition, but the fund pays by unit at a rate of about $250 per semester credit hour, right?
  • ScienceGirlMomScienceGirlMom Posts: 260Registered User Junior Member
    The following might or might not apply to your particular situation with the Texas Tomorrow Fund:

    In the event of a scholarship that is equal to or better than the Texas Guaranteed Tuition Plan, you can apply for a "scholarship refund." From there the money can go to the school, or you can direct it to a 529 plan. Both of these options will avoid taxation. If you take a cash distribution, taxes will come due.

    Texas Guaranteed Tuition Plan - Scholarships and Financial Aid

    It is correct that you can have an out-of-state or private school send a bill to the Texas Tomorrow Fund, and then you would be required to submit the difference to the school.

    The cash refund or scholarship refund rate is set year by year. It is set for this fall at $265.96 per hour. The following is from the website:

    2012-2013 Academic Year average tuition and required fee rates
    (Effective Fall 2012 - Summer 2013)
    Cancellation forms received prior to September 1 each year will be refunded at the prior academic year rates.

    •$85.65 for junior college plan hours
    •$265.96 for senior college plan hours
    •$693.51 for private college plan hours
  • GalaxyfigmentGalaxyfigment Posts: 397Registered User Member
    I hope someone has an answer to this question. We have a similar plan in Tennessee and I don't know how to report it on the FAFSA.

    Note: We did use some of the funds to pay an OOS University for a PreCollege program.

    As for scholarships - we too can take the money out of the plan if we have proof of a scholarship. We have decided to save it for Graduate School. If he makes it through undergraduate with his scholarships paying the way, we will have money for his grad school.
  • kelsmomkelsmom Posts: 12,570Super Moderator Senior Member
    From the FSA Handbook:

    Prepaid tuition plans

    Prepaid tuition plans are ... are treated the same as Coverdell education and 529 savings accounts: their value is considered an asset of the owner of the account, unless the owner of the account is a dependent student. When the owner is a dependent student, the value of the account is reported as an asset of the parents on the FAFSA.
  • onesonmomonesonmom Posts: 213Registered User Junior Member
    So, here's another question: if my EFC is $12,000 and the Texas Tomorrow Fund pays the OOS college's tuition bill using the semester hour unit at $265.96 then that $7978.80 (for 30 hours) is counted as part of my EFC contribution??? For example, if my EFC is $12K and TT pays $8K then I am only expected to pay the remaining $4K, right?

    The reason I ask is that it would seem wrong in so many ways if my $12k EFC means "out of my other pocket", not to include the pocket containing the savings plan I scrimped to pay all these years for this purpose.
  • kelsmomkelsmom Posts: 12,570Super Moderator Senior Member
    EFC does not really mean "what you pay." EFC is simply a number used to determine eligibility for federal aid. In this context, your question does not make sense. Let me attempt to answer:

    "Texas Tomorrow Fund pays the OOS college's tuition bill using the semester hour unit at $265.96 then that $7978.80 (for 30 hours) is counted as part of my EFC contribution??? For example, if my EFC is $12K and TT pays $8K then I am only expected to pay the remaining $4K, right?" What I get from this is that you estimate your savings plan will pay out $7978.80. What is the COA (cost of attendance)? THAT is relevant. With an EFC of $12,000, you are not eligible for any federal grants (Pell or SEOG). If you attend a private college that meets need (or gives very good aid), you might receive some institutional grants from the school. The school will use COA-EFC to determine your eligibility for aid. They will not count your TTF money in aid; that is counted as a parent asset on the FAFSA & does not count against you for purposes of computing aid.
  • 2collegewego2collegewego Posts: 2,585Registered User Senior Member
    Since it is counted as a parent asset, it would be assessed by FAFSA at 5.64% *after* the asset protection allowance (which depends on the age(s) of parents and whether it is a 2-parent or single-parent household). It is not subtracted directly from aid. To determine the amount you need to put on the FAFSA, call the customer service number and ask them. They will tell you what it is worth right now.

    Profile schools can use the info however they want.

    So, an example:

    You call TTF and they tell you it is worth $8,000. You also have $20K in the bank and own your own home. Your asset allowance is $24K. Your EFC will be calculated like this:

    Assets = $20K + $8K (value of home doesn't count) = $30K
    $30K - $24K = $6K
    $6K x .0564= $338.40

    So your EFC would increase by $338.40 in the first year. Each year, the figure would change.
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