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Texas Tuition Promise Fund

Prepaid Plan

Prepaid Plans let you pre-pay all or part of the costs of a college education. They may also be converted for use at private and out-of-state colleges. Because of the unique structure of these plans, they are not considered in our ratings methodology.

This unit-based prepaid plan provides Texas families with an opportunity to prepay future tuition and mandatory fees at Texas public institutions. By shifting the tuition risk to the state's public universities and colleges (under Texas law), the program is able to offer units at current tuition levels.

OVERVIEW

Program type

Prepaid unit

Enrollment period

September 1 thru February 28 (July 31 for newborns.) First payment is due on the following May 1.

Inception

2008

State agency

Texas Prepaid Higher Education Tuition Board; program manager is Orion Advisor Solutions, Inc.

Tax deduction

For single filers: None

For joint filers: None

MORE INFORMATION

Eligibility

State residency requirements:

The beneficiary must be a Texas resident or have a parent who is a Texas resident and is the named purchaser at the time of enrollment.

Who can be a participant/owner in the program?

Individuals at least 18 years old, UGMA/UTMA custodians, and legal entities.

Significant time or age restrictions imposed by the program:

The beneficiary may not use the tuition units within three years of the date the units were purchased. Tuition units must be used within ten years after the projected date of high school graduation, excluding any periods of active duty service in the United States Armed Forces.

Contributions

Maximum contributions:

The maximum purchase for any Tuition Unit type is equal to the dollar amount of 600 Type I units. Maximum Texas Program Limit. There is a $370,000 cap for total contributions in all Texas prepaid and college savings plans for one Beneficiary.

Minimum contributions:

One unit initially; subsequent purchases must be at least $15. Extended payment plans are available.

Contractual Features

Current value of one unit:

Same as current unit price if used for in-state public institution; the lesser of in-state value or contributions-plus-earnings if used for private or out-of-state institution.

Current unit price:

Tuition Units are the unit of measure used to purchase prepaid tuition. Generally, one unit represents one percent of the cost of tuition and required fees for 30 semester hours at the school that most closely matches the unit’s pricing structure.

Are program benefits backed by the full faith and credit of the state?

Are program benefits collateralized or guaranteed in any other way?

Under Texas law the public colleges in Texas must accept less than full tuition and fees if the fund's investment return fails to keep pace with tuition and fee increases.

Fees & Expenses

Enrollment or application fee:

$25

Taxes and other Benefits

Tax deduction for single filers:

None

Tax deduction for joint filers:

None

Note:

Texas doesn't offer tax deductions

Program match on contributions:

State tax deduction or credit for contributions:

Not applicable. Texas does not have a personal income tax.

State tax treatment of qualified distributions:

Not applicable. Texas does not have a personal income tax.

Does the sponsoring state exclude the value of an account for state financial aid purposes?

Yes

Does participation in the program provide beneficiaries with any advantages in qualifying for resident tuition status at state institutions?

Is there a rewards program or outside scholarship program that works with this program?

Yes, the Upromise Rewards program can be linked to any 529 college savings plan. Upromise Rewards is free to join and offers members cash back for college.

Statutory protection of an account from creditors:

Distributions & Terminations

To whom are distributions made payable:

Tuition payments are made to the educational institution that the beneficiary attends.

Account Changes

Policy regarding participant/owner changes:

Accepts requests to transfer contract ownership.

Documents, Access & Reporting

Does participant have online password-protected access to account?

Yes

Can the complete enrollment process including funding be done online?

Yes

Contact

Website:

http://www.texastuitionpromisefund.com

Telephone:

1-800-445-4723

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