Eight years ago we signed up for the Texas Tomorrow Fund (now known as the TGTP) for our first-born baby girl.
The idea is, you pre-purchase college credits at today’s prices. When your kiddo graduates from high school, they can attend a Texas public college and use those credits. If your kiddo turns 18 and decides not to attend a Texas school, you can cash out yourcredits at the average current tuition cost at that time.
Or at least that was the rule.
Texas has decided to change this policy so that if your kid doesn’t attend a Texas school, all you will get back is the money you paid in. Minus administrative fees. Forget the fact that they had the use of your money, interest free, for almost 20 years.
We never would have signed up under this arrangement; it’s too risky. I think our kids should be able to go where they please.
So far we have contributed in the neighborhood of $17,000 to our daughter’s fund. That is seventeen thousand dollars that the state has had at its disposal over the past eight years. Now the best they’ll do is refund it. We have a written contract which states otherwise, but Texas is not going to honor it. Let me be more accurate: the prepaid tuition board has decided not to honor their contract with us, and the state legislature is not doing anything about it.
My son’s college fund is with the Oklahoma 529 Savings Plan. It has gotten great returns, year after year, even when the stock market has been down. Even though we started it 4 years after our daughter’s plan, and have always put the same amount in both funds, his is now worth more than hers. That’s what interest will do for you.
If at any point I had decided not to keep my end of the contract, the state would have come down on me like a ton of bricks. They are playing by different rules, apparently, rules which are outside the law and eschew ethical behavior.
I am disappointed and angry. This is not the state I knew Texas to be. Who is running this place now?
More on that Monday, and how my state representatives have responded to our written complaints.
{ 4 comments… read them below or add one }
Welcome back to Texas! Welcome to conservative blogging Texas style. I can hardly wait for the next Post!
brazosconservative´s last blog ..The Real Perry
Howdy, Kathy!
I’ve been reading the reports with a mixture of shock and disbelief–both in the original terms and in the way it’s currently being handled.
Hubby and I talked about investing way, way back when the fund was first invented. I wanted to; he didn’t.
So we didn’t. Turns out it could still go either way. Our first one went to private school, so we would have cashed out before the policy changes. Second is in a UT school, and we have already paid about half of what we would have invested if we had been the first folks in to the plan, and he’s only in his first semester.
So it really depends on the last two. Who knows?
I do understand why you are upset. I know you aren’t the only one.
The Mother´s last blog ..The Apparatus for Facilitating Childbirth by Centrifugal Force
That’s why we did it for the first one, but not the second. We could cash it out or transfer it to another child. For the second kiddo we went with a less restrictive plan – plus it was closed by the time he was born anyway, and we didn’t live in Texas then.
My biggest problem is how they change the terms willy-nilly without oversight. No non-government entity would be allowed to do that.