A plan that will grow right along with them.
David and Kathy Morales’ Profile:
- 39- and 37-year-old parents of three
- David is employed in sales and marketing. Kathy works part time.
- Children – Joseph (10), Teresa (6), Mary (3)
David Morales, 39, is the sales and marketing director for a national firm specializing in health care facility renovations. He previously served eight years as a U.S. Navy officer. His wife Kathy, 37, works part time as a real estate agent while Joseph, 10, and Teresa, 6, are in school. Kathy’s mother watches Mary, 3, while Kathy meets with clients. The family’s annual income is $130,000.
The Moraleses know the importance of college, as both completed four-year degrees—David in engineering and Kathy in family studies. The Morales house is a full one, and with a child about to start middle school, David and Kathy are beginning to think more about paying for college. Joseph is interested in engineering principles, like his father, but is also very interested in aeronautics and aircraft design.
The Moraleses are confident they can budget five percent of their monthly income toward college savings. That amount should climb within three years when Mary starts school and Kathy takes on more real estate clients.
The Morales’ Solution:
The Moraleses know paying for college for three children will not be easy and that they need to start saving now. The Texas Tuition Promise Fund offers them flexibility to spread out their payments as their budget permits and their children grow.
For only $448.14 per month, the Moraleses could start prepaying tuition and required fees for each of their three children. When Kathy starts working full time, her additional income could be used to finish pre-paying the younger children’s education. The Moraleses know that if Joseph gets a scholarship and does not use all of his prepaid tuition units, they can change the beneficiary of the account to one of their other children.
- For 10-year-old Joseph, the couple could make monthly payments of $380.01 for eight years to prepay four years of the average cost1 of tuition and required fees at a four-year Texas public college
- For 6-year-old Teresa and 3-year-old Mary, the couple could start prepaying for each child by making monthly payments of $68.13 for five years to purchase a half-year of the average cost1 of tuition and required fees at a four-year Texas public college.
Texas Tuition Promise Fund
The Texas Tuition Promise Fund sells tuition units that represent a fixed amount of semester hours at prices determined today.
Your tuition units can be used at Texas public colleges and universities, as well as private colleges in Texas and schools throughout the U.S. You can purchase tuition units all at once, buy them over time or get them through an installment plan. Regardless of which payment plan you select, your account must be open at least three years from the initial payment due date in order to use your tuition units to pay for tuition and required fees.
| Tuition Units | What They Cover |
|---|---|
| Type I: All-Texas College Units | Type 1 units cover tuition and required fees at any Texas public college or university, regardless of its cost. |
| Type II: Texas 4-Year College Units | Type II units are less expensive and are based on the weighted average cost1 of tuition and required fees for in-state students at four-year Texas public colleges and universities. |
| Type III: Texas Junior College Units | Type III units, the least expensive, cover the weighted average cost1 of tuition and required fees for in-state students at two-year Texas public colleges. |
Morales Family’s College Savings
(Allocating $448.14 per month to Texas Tuition Promise Fund)
| Texas Tuition Promise Fund Type II |
Five Years Later |
Eight Years Later |
|---|---|---|
Make monthly payments of $380.01 for eight years to purchase 400 Type II units for their oldest child, and make monthly payments of $68.13 for five years to purchase 50 Type II units for each of their two younger children. (Pricing for 2008-2009) |
A half-year of the average cost1 of tuition and required fees at a four-year Texas public college is paid for both Teresa and Mary. |
Four years of the average cost1 of tuition and required fees at a four-year Texas public college are paid for Joseph. |
Note: When Kathy starts working full-time, some of her additional income will go to purchase additional Type II units to prepay the remaining three-and-a-half years of Teresa’s and Mary’s college education.
Build Your Own Plan
Need help building a plan? Use our online calculator to research the unit pricing and payment options available through the Texas Tuition Promise Fund.
Visit the Texas Tuition Promise Fund Web site at www.TexasTuitionPromiseFund.com to get started.
For details on the jobs of tomorrow and strategies for the education needed, please visit:
www.EveryChanceEveryTexan.org.
For more information on the prepaid tuition plan offered by the state of Texas, please visit:
www.TexasTuitionPromiseFund.com.
1Each year, the Plan looks at the average cost of a year’s tuition and required fees at all Texas public colleges and universities. The average is then adjusted based on attendance at each school to determine a weighted average tuition.
The Texas Tuition Promise FundSM is established and maintained by the Texas Prepaid Higher Education Tuition Board. OFI Private Investments Inc., a subsidiary of OppenheimerFunds, Inc., is the plan manager. Some states offer favorable tax treatment to their residents only if they invest in the state’s own 529 plan. Non-residents of Texas should consider whether their state offers its residents a 529 plan with alternative tax advantages, and should consult their tax advisor. The Contracts are not deposits or other obligations of any depository institution. Neither a Contract nor any return paid with a refund is insured or guaranteed by the FDIC, the state of Texas, the Texas Prepaid Higher Education Tuition Board, any other state or federal governmental agency or OFI Private Investments Inc. or its affiliates. The Contracts have not been registered with the U.S. Securities and Exchange Commission or with any state.
Purchasers should carefully consider the risks, administrative fees, service and other charges and expenses associated with the Contracts. The Plan Description and Master Agreement contain this and other information about the Plan, and may be obtained by visiting www.texastuitionpromisefund.com or calling 1.800.445.GRAD (4723). Purchasers should read these documents carefully before purchasing a Contract.
“Texas Tuition Promise Fund” is a service mark (registration pending) of the Texas Prepaid Higher Education Tuition Board. All rights reserved.
This material is provided for general and educational purposes only, and is not intended to provide legal, tax or investment advice, or for use to avoid penalties that may be imposed under U.S. federal tax laws. Contact your attorney or other advisor regarding your specific legal, investment or tax situation.
