When Gov. Rick Scott signed a college-tuition measure last week, most of the attention focused on allowing in-state tuition rates for undocumented immigrants and rolling back a law that allowed universities to raise tuition without legislative approval.
But tucked inside the bill was another little-debated provision that will lower the costs of prepaid tuition plans.
With Scott making an issue of the price of higher education in his re-election campaign, the governor is starting to tout the changes to the Stanley G. Tate Florida Prepaid College Program, which allows families to pay years in advance and lock in the costs of sending students to state colleges or universities.
"This is a great victory for families who want to ensure their students can get a great education, start a successful career, and live the American dream right here in Florida," Scott said in a statement issued Wednesday by his campaign.
The measure reinstitutes a cap on the fund's payments to colleges and universities, which is in turn projected to lower the cost of the prepaid plans for parents and students. If tuition and fees end up above the cap, then the schools couldn't collect that money on students with prepaid accounts.
The cap is based on the size of the reserves held by the prepaid plan.
The new law also rolls back the state's "differential tuition" program, which allowed the Florida Board of Governors to increase tuition at state universities by as much as 15 percent a year. Because the prepaid program had to take into account the possibility of differential increases, the process was blamed for a dramatic increase in the costs of prepaid accounts in recent years.
Now, only the University of Florida and Florida State University will be able to ask for the differential increases, which will be capped at 6 percent and will only be available if the schools meet certain standards.
According to the board that oversees the prepaid plan, the price of a 4-Year Florida University Plan for newborns could drop by close to $20,000 — from almost $54,000 to about $35,000 — while monthly payments could slip by about $100 a month.
An analysis of the bill issued Tuesday by legislative staff, also citing numbers from the Prepaid College Board, said the cost of the plans would drop "by at least $10,000." It also said about 26,000 families will get refunds totaling $50 million.
The board says no one who already has a prepaid account will pay more for their plans than they would have if they signed up under the new law.
"Because of this law, the prices of university prepaid plans will be significantly reduced, helping more Florida families save for their children's higher education," Duane Ottenstroer, chairman of the board, said in a statement released Wednesday.