Prepaid tuition option and health insurance

<p>Parents: does it make sense to prepay four years of tuition? It seems that many colleges allow students/parents to prepay 2-4 years of tuition in the freshman year and avoid tuition increases. What happens if parents choose this option and the student transfers or needs to withdraw for whatever reason? Is the unused tuition refunded? Also, do most parents choose the university health insurance plan or do they find their own policy? The US health insurance maze is still a mystery to me. Thanks.</p>

<p>It would only make sense if you thought the rate of tuition increases over the next few years would exceed what you could earn on the money invested somewhere. Tuition increases recently have been pretty high -- more than one could earn with less risky investments. So it might make sense depending on where you would invest the money in the meantime.</p>

<p>Most tuition plans have an "exit strategy," but you would have to read the fine print of a particular plan to understand it.</p>

<p>For an international student, the university health plan might be the best option. My guess is it would be close in cost to an individual health care plan for the student and certainly less trouble to put in place. My experience with my two domestic college students at different schools is that for one the university plan was better than our family plan, and for the other it wasn't.</p>

<p>thanks dt123. My D is actually an American citizen, born in the US but has been living and educated overseas. We are already covered by an expatriate health insurance plan through my husband's US based company. I am not sure whether we should keep her on our family plan (though she won't be considered an expatriate anymore) or buy the university plan. Do most students enroll in the university health plan?</p>

<p>I don't know what "most" do. In our case one did, the other didn't. You just have to compare the details.</p>

<p>From my reading, it appears that pre-paid tuition plans are mostly offered by public colleges and universities, so you your choice of schools may be restricted if your child wants to leave his/her home region when that day comes. That being said, read such plans carefully. Also, find out if you need be a state resident to sign up for a school located in a college in which you do not presently live.</p>

<p>LakeWashington, I believe the OP was talking about the tuition prepayment programs at particular universities were you pay at the outset of freshman year, not the programs in some states where you put money away for use later in that state's schools.</p>

<p>The particular university programs are offered by private universities as well. The ones I've looked at do allow for refunds. We did this for our son but not our daughter. His school had had dramatic rate hikes and was considered "hot." Its program also includes room and board, which had also been increasing. He's a junior now and we've saved far more than we would have been able to earn on these funds.</p>

<p>But my daughter's school hasn't been increasing that dramatically and the program doesn't include room and board. Further, my MIL wanted to help each year with tuition. So it didn't make sense to do it with her school.</p>

<p>If you have to borrow to prepay the tuition plan, it would only make sense to do this if you could borrow at a lower interest rate than the expected tuition rate increases.</p>

<p>As far as the health plans are concerned, we've also done two different things. At my son's school it is mandatory to use (and pay) for the university health plan, even though he is covered by our insurance. At my daughter's school we could opt out and so saved quite a bit of money.</p>