Just ask Dennis Nolte. The senior vice president for Seacoast Investment Services in Winter Park, Florida, had the foresight to invest a lump sum in Florida’s prepaid college tuition plan in 2014 for his daughter Jessica, then aged 12.Jessica is now a sophomore studying finance at the University of Florida in Gainesville, with her tuition and fees all paid for.
“It does feel pretty good to know that no matter what inflation doing, we have got this covered,” Nolte said.Nolte’s experience shines a light on an interesting corner of the U.S. college-savings market: ‘Prepaid’ plans which let you buy credits or years of education at a set rate.
When the price of everything seems to be going up – the annual U.S. inflation rate was 8.5% as of July – the idea of fixing future expenses at current levels can be appealing. This is especially so in higher education, where the average annual sticker price for four-year in-state colleges has risen to $10,740; four-year out-of-state colleges hit $27,560; and private nonprofit colleges are $38,070, according to the College Board.