News Update

News Update, December 13, 2007

Florida Prepaid College Board Not Invested In
State Board of Administration Local Government Investment Pool

You may have read recent news reports on the State Board of Administration’s Local Government Investment Pool, whose investors include local school districts and local governments.

The Florida Prepaid College Board has no funds invested in the State Board of Administration’s (SBA’s) Local Government Investment Pool.

The Florida Prepaid College Board does utilize a separate SBA cash management account for the purpose of writing checks on a routine basis to pay the expenses of the Florida Prepaid College Plan and the Florida Prepaid College Board. These include payment of tuition and fee invoices to colleges and universities for Florida Prepaid College Plan students.

Your Florida Prepaid College Plan contract is guaranteed by the State of Florida. Under state law, the Legislature must meet the obligations of the Florida Prepaid College Board to qualified beneficiaries in the event of a shortfall of funds or a discontinuation of the Florida Prepaid College Plan. Qualified beneficiaries accepted by, enrolled in or within five years of enrollment in a state college or university or eligible independent college or university would be entitled to use full benefits under the Florida Prepaid College Plan. Other contract holders would receive the amount they paid into the plan plus interest.

The Florida College Investment Plan is different from the Florida Prepaid College Plan and is not guaranteed by the State of Florida. The Florida College Investment Plan is an investment as opposed to a guarantee of prepaid college expenses. Participants in the Florida College Investment Plan decide how to invest their money from among the investment options available through the Florida College Investment Plan. The investment options have different levels of risk.

The Florida Prepaid College Board Annual Report includes the audited financial statements and actuarial report. To learn more, read the Annual Report.

The Promise Is Kept to Families with Prepaid Plans

The promise made when you purchased a Florida Prepaid College Plan that you locked in today’s tuition plan prices for tomorrow’s college education was kept by Governor Charlie Crist and the 2007 Legislature.

Governor Crist on June 27 signed into law a tuition differential fee approved by the Legislature, but the law exempts families that currently have either a Prepaid University Tuition Plan or a University plus Community College Tuition Plan contract from paying the fee now or in the future.

Crist said he was taking this action with the understanding that universities would wait until fall 2008 before implementing the new fee.

Newly enrolled students at University of Florida, Florida State University and University of South Florida will be charged the tuition differential fee authorized in Senate Bill 1710. During legislative deliberations, many families with Prepaid Plans contacted their legislators to express concerns about the state of Florida standing behind its Prepaid Plan guarantee. Lawmakers responded by amending SB 1710 to exempt current Prepaid Plan customers holding either a University Tuition Plan or University plus Community College Tuition Plan contract from paying the tuition differential fee.

The tuition differential fee may be as much as 40 percent of regular tuition at the University of Florida and Florida State University and up to 30 percent at University of South Florida, though overall tuition at these universities can increase no more than 15 percent a year. The additional revenue generated by the new fee will be used to hire faculty and academic advisors.

Governor Crist earlier vetoed a separate 5 percent tuition increase slated to take effect in the 2007-08 academic year.

Current Prepaid Plan families should feel secure. Governor Crist and the Legislature have kept the Prepaid Plan promise.

Frequently Asked Questions about Tuition Differential Fee