Texas Tuition Promise Fund

From the burden of everyday living and building towards a retirement prior to hitting 50; our kids education is also a very high priority for us.

529 plan or texas tuition promise fund

ride a mutual fund that can cover everything or pre-paid only for tuition and fees at today's cost.

I think we are going with a 2 way approach of hitting both. First attacking the promise fund just because the stock market really isn't the best time to buy (but it will be in a couple months).

So I was wondering what happens if the money I put my money in and the fund doesn't perform well enough to cover the inflation of college tuition? Says the University is responsible if the fund under performs. That seems kinda weird but that's better than the promise fund having to pay the difference.

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"Launched last September, the Austin-based plan shifts the burden of unfunded liabilities to the universities. By contrast, the state had been responsible for any shortfalls in its old prepaid plan, the Texas Tomorrow Fund, which was closed to new enrollment in 2003.

”If tuition inflation is greater than the rate of return on the plans’ funds, the university is obligated to make up the difference,” said Kevin Dieters, director of the education opportunities and investment division in the Texas Office of the Comptroller of Public Accounts in Austin.

Indeed, the primary appeal of the Texas plan is that “the risk lies with the schools. There is no more state guarantee,” Mr. Raynor said.

“Texas is clearly a model. There has to be risk sharing or [prepaid plans] won’t work,” said Jacqueline Williams, executive director of the Ohio Tuition Trust Authority in Columbus, which closed its prepaid plan in 2004.

Since the Texas plan’s launch in September, more than 4,800 students have been enrolled, and approximately $100 million worth of contracts have been sold.

The plan’s fund is managed by OppenheimerFunds."