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How To Afford College

The Bibles Have 4 Kids, But Their Tuition Is Pre-Paid

Kathy Waters/Highlands Today

Front from left: Josh, 5, Emily, 7, Ashley, 3, and Jay, 9, will have money saved for college tuition when they get out of high school. Their parents, Susan and Andrew Bible, are putting in money into the Florida Prepaid College Plan, which will help pay the tuition for their college years.

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By Gary Pinnell | Highlands Today

Published: December 19, 2007

SEBRING — To pay college tuition, some parents take out a second mortgage on their home, postpone retirement, or require their children to borrow tens of thousands of dollars in bank loans and credit cards.

Andrew and Susan Bible have four children, Jay, 9; Emily, 7; Josh, 5, and Ashley, 3. And they're hoping all four will go to the University of Florida.

"My wife and I are both alumni," Bible said with a chuckle.

So how will they pay for four college educations? Several years ago, Bible listened to friends talk about the Florida Prepaid College Plan.

"I waited a couple of years," said Bible, the chief financial officer at Heartland National Bank, "but I kept thinking, 'I need to get it. I gotta get this done, with the way tuition prices are rising.'"

Meanwhile, the cost went up $2,000 to $3,000.

Projected Costs

According to the college calculator at http://apps.collegeboard.com, if a child is 13, and college costs rise at 5 percent a year, the $15,070 it takes to attend the University of Florida today will rise to $19,234 by 2012. That makes all four years cost $83,000.

If parents cover only 35 percent of the college costs from savings, and they start today, they'll need to save $29,015 in those five years.

Four years in a private college is estimated to cost $200,000, if they enroll within five years, or $440,000 for a baby born today.

The only good news is that the average lifetime earnings potential of a college graduate is $1 million more than a non-college educated counterpart.

The trick, according to on-line investment counselor Charles Schwab, is to start saving long before its needed. For instance, over 20 years, $100 a month of savings can earn $24,000 in principal and $36,000 in interest.

How The Bibles Did It

The total cost of the Florida Prepaid College Plan more than two years ago was about $10,000 per child, which doesn't include room and board. The Bibles had three options: they could pay in one lump sum, which they couldn't afford. They could stretch payments over five years, or continue paying in monthly installments until their children were expected to enter college.

"We took the five-year deal," Bible said. "I told my wife, I just couldn't bear paying that for 18 years."
The bill for all four children costs about $200 a month, Bible said. If they had chosen the 18-year plan, it would have cost about $50 a month per child.

"I'll have that thing paid for in a couple of years, as long as they go to school in the state," Bible said.
Which brings up a good question. What happens if one child gets accepted to Harvard?

"If the student decides to attend a private college, an out-of-state college or a vocational/technical school, the value of the plan may be transferred to any eligible institution," said a press release from the program.

"You can get your principal back, with no interest," Bible said. "Or you can transfer it to another child."

Plan B

There's a second program, the Florida College Investment Plan. Investment firms like Schwab sell similar Section 529 plans, authorized by the Internal Revenue Service. They're mutual funds, invested in relatively safe securities.

But like housing and automobile prices, college tuition seems certain to rise in the future, so Bible chose instead to lock-in the 2004-05 tuition rate.

While they're paying for a house, two cars, credit card bills and vacations, lots of parents will feel they can't afford another $100 a month on pre-paid tuition.

"You just have to set it to be a priority," Bible said. "Both of my parents are educators." His father was the deputy superintendent of schools, his mother was a physical education teacher.

Bible gives one more reason why he started early.

"Anything could happen," he said. If one or both parents die, Bible wanted to make certain the future of his children was protected.

To lock-in 2007-08 plan prices, families must enroll by Jan. 31.

More info: Diane Hirth, Florida Prepaid College Board, 850- 488-8514 or diane.murdock@myfloridaprepaid.com.

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