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Pros and Cons of Prepaid Tuition Plans

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He glanced at the screen. "Why are you looking at that?" he asked, striving for an even tone.

"Why not?" I challenged back. You see, for my husband, the "strictly the facts" guy in our house, 529 prepaid tuition programs don't make much sense, especially compared to 529 college savings plans. He sees all the cons.

Prepaid tuition programs are exactly what the name implies: the chance to pay now and buy a certain number of educational credits/years of college at today's tuition rates. Or so the promotional materials like to say. But the truth is, you might pay more than today's tuition rates in the form of a premium, depending on your state's plan. Consider that for my husband and me to buy one year's worth of tuition (as well as mandatory fees) for our kindergartner in our home state of Virginia, we'd have to contribute $9,333 to the Virginia Prepaid Education Program. Yet a year's worth of tuition and mandatory fees at William & Mary (my alma mater — go Tribe!) for the 2006-2007 academic year is just $8,490.

Indeed, there's a fair-sized list of cons:

Cons:

But as in all stories, the cons are only half the picture. Here's the sunny side of prepaid college tuition plans.

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