The Florida Bright Futures Scholarship Program establishes three lottery-funded scholarships to reward Florida high school graduates for high academic achievement. Some families think they don’t need a college savings plan because of the Bright Futures Program, but we disagree.
- Because the Bright Futures Scholarship is dependent on your child’s grades and test scores, you cannot guarantee your child will earn it and we think parents should hedge their risk by purchasing a Florida PrePaid Plan.
- If your child does earn a Bright Futures Scholarship, the Florida PrePaid Plan is still paid out to your child’s bursars account at their school. If there is extra money in the account (which there will be with the Bright Futures Scholarship and the Florida PrePaid Plan), then the extra money is refunded to you.
- The terms of the Bright Futures Scholarship were changed during the 2008 recession when the State decided it couldn’t afford the Bright Future Scholarship Program at the then current levels. So, there is no guarantee that the Bright Futures Scholarship will be available when your child is ready to enter college.
So, in our minds, there is no downside to purchasing a Florida Prepaid Plan from the possibility of the Bright Futures.
However, a question we often get is: How are the PrePaid funds allocated if my child is granted a Bright Futures Scholarship?
The straightforward answer is that the Bright Futures monies will be applied first to tuition, then the current dollar value of your child’s Florida PrePaid Plan will be applied to their college account.
The money can be used to pay for any other expenses besides tuition, such as: local fees, dormitory costs, meal plans, or books. Any leftover money will be refunded to you. The refund will be at the current rate, not what it was when you paid into the plan.
As parents, we’d all like to believe our children will succeed when it comes to scholarships. With a program as solidly funded as a Florida PrePaid Plan, even if a Bright Futures Award is not in their future, parents will at least have a contingency strategy.
If you would like help choosing and investing in a 529 or College PrePaid Plan, please contact me at firstname.lastname@example.org or (813) 282-7870. While we believe a college education is important, we also understand it is expensive, and the process is daunting.
We do not charge fees for helping with 529 Plan accounts. We get two benefits from helping you: 1) as parents ourselves, we feel good about setting you and your child on the correct path to pay for college and 2) it enables us the opportunity to begin a discussion about your other investment needs.
If you have a question beyond the scope of this article, feel free to visit our “Ask Us a Question” page or leave a comment below so we may assist you with your specific situation.