By Nicole Pesecky | email
LUBBOCK, TX (KCBD) - Questions from concerned parents prompt a NewsChannel 11 investigation into the popular statewide prepaid college investment program, the Texas Tomorrow Fund.
The Texas Tomorrow Fund has experienced a lot of changes throughout the years. The program stopped enrollment back in 2003, and then launched up again as the Texas Tuition Promise Fund in September of 2008. Enrollment was once again canceled and then reinstated this September. And now after November 30th more changes to come that don't exactly benefit those involved.
Eight-year-old Ben Slyker is a very busy boy. From shooting hoops, to taking care of his brand new baby sister, to multiplication tables, he's got a full plate. Right now, his main focus is probably not where he plans to attend college, but his parents started planning from the beginning. They enrolled Ben into the Texas Tomorrow Fund back in 2001. Ben's dad John Slyker says, "We're paying into a policy for Ben for a 4-year college to a Texas school."
As long as they stick to that plan, nothing changes from that original contract. Parents investing funds into this program should have received a letter back in August, but the problem many are expressing is that the way the letter reads is complicated, leaving parents puzzled about what's really changing with the tuition program. John explains, "The letter was very confusing. It had a graph that we didn't understand and a lot of legal terms."
After investing $12,000 to the program, this family doesn't want to lose money in the end. State Representative Carl Isett says they don't need to worry about that happening if they're using the program for educational purposes and not trying to make a profit. "We were guaranteeing people very high returns virtually risk free if they did it, and what has happened over time is that some people chose not to use the money for higher education but rather kept the money in the fund as an investment that costing Texas taxpayers a great deal of money," Isett says.
It's because of that you will see changes to the program after November 30th. Here's what you need to know - the refund amount when you cancel your contract won't be as high as it use to be. RJ DeSilva, spokesperson for the Texas Comptroller's Office, says, "There is a $25 contract cancellation fee, and a $3 a month if you were doing installment plans."
So the longer you've invested, the more you may potentially lose if you decide to pull out. "I think they've lost track of whose money it is and it's mine, or it's ours, to do what we want, and not theirs to do what they want," John says.
Isett says there's still time to pull out without losing out, but you have to do it before November 30th. "If your child is now 28, which is the length of term and your money is still sitting there, then clearly you want to take the money out because your greater return is about to go to very little," Isett states.
If your child does receive a scholarship, you can transfer the money invested to another beneficiary, such as a sibling or grandchild, but the student is only eligible to use the funds 10 years after they graduate high school.
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