Parents wanting to enroll their baby in the Florida Prepaid plan face paying a mind-boggling $49,293 for four years tuition at a public university -- or $298 a month until the October before the child graduates from high school.
That's more than triple what parents paid just four years ago.
Florida Prepaid administrators blame it on a law that allows public universities to make hefty increases in tuition and other fees.
Here are three cheaper alternatives:
Invest half that -- or $150 a month -- in mutual stock funds in a tax-free 529 college savings plan and you would have $54,000 at the end of 17 years. That's assuming you earn 6 percent a year. But there's a risk that the stock market will not deliver or that the university will raise tuition more than what you have saved.
Enroll in a cheaper Florida Prepaid program: It is only $48.73 a month, for example, to pay for your child to go two years at Palm Beach State College or Broward College. Or you could pay $199.37 a month for your child to go two years at a community college and two more at a public university. Both plans require you to make the payments until the October before your child's high school graduation.
Do a combination of both -- saving in a 529 college plan and paying for one of the cheaper prepaid programs.
What's key is to regularly put away money to allow funds to accumulate.
If you want to enroll in the Prepaid Program you have until Jan. 31, 2012. You will have to wait until next year to enroll if you miss the January deadline.
Go to www.myfloridaprepaid.com for more information.
An earlier version of this blog post gave the incorrect name for the federal tax-free college savings program.
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