The economic tumult of recent years not only forced many colleges to push tuition higher, but wiped out many of the tools that promised protection against that tuition inflation. Luckily, parents or students interested in avoiding future tuition increases still have several options:
- They can choose one of the dozens of colleges that lock in a freshman's tuition price for four years. (Though, of course, room, board and book prices may rise.)
[Read more about guaranteed tuition colleges.]
- They can choose one of the handful of colleges that allow parents willing to pay a premium over today's tuition prices to lock in a flat rate for four years.
- Those who can scrape together a big enough lump sum to cover all four years' costs up front, can choose one of the dozens of colleges, including well-regarded schools like Vanderbilt University and Middlebury College, that allow parents to prepay at the freshman-year rate.
- Those who are facing tuition bills at least one year from now can invest in one of more than a dozen "prepaid" college savings plans that allow them to buy tuition credits today. At least two—Alaska's and the "Independent 529" that serves about 270 private colleges—allow investors to lock in today's tuition prices. The rest charge a premium of anywhere from 4 percent to more than 20 percent because investments lately haven't been able to keep up with tuition hikes. (Warnings: Some prepaid college savings plans require investors to wait at least three years before cashing out. And some prepaid college savings plans are facing financial troubles that could threaten their ability to keep their promises.)
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