Prepay tuition or not?

<p>From the Dartmouth website, tuition increases for the last few years were as follows:</p>

<p>99-00 3.5%
00-01 3.5%
01-02 3.5%
02-03 4.5%
03-04 4.9%
04-05 4.5%
05-06 4.9%</p>

<p>Tuition increases can be avoided by prepaying all four years up front.</p>

<p>I suppose if you've got $170,000 lying around, it's not a bad idea.</p>

<p>I think it's only for tuition, not room and board.</p>

<p>DH and I are considering it, we would have to borrow a portion of the money, however. Our current plan is to try to stay close to 1 year ahead in banked money, and see how she likes the school (read the distance and weather, we're in Alabama). You can pre-pay from 2-4 years, and we may opt to pre-pay the remaining 3 years next year. Two big issues for us are timing of payments, plus tax advantages of borrowing on home equity.
Running some numbers, using 4.9% tuition increase, and assuming very safe investment of capital, plus borrowing 3 of 4 years on the home equity and deducting the interest - we just about broke even - that was part of the decision to just pay this year and see how things go.
Greensleeves - we do have confidence that you will stay! Just doesn't sound like it!</p>