The Prepaid College Board will likely have to shell out billions of dollars more in tuition payments over the next couple decades under an agreement reached last week.
The board, which oversees Florida's prepaid tuition plans, will have to pay between $2 billion and $3 billion more to the state's 11 universities over the next 24 years, said Florida Board of Governors spokesman Bill Edmonds.
The agreement, passed by the Board of Governors at Thursday's meeting, still needs to be approved by the state Legislature.
Under the agreement, the prepaid program will be required to increase its tuition payments between 6 percent and 6.5 percent each year for contracts sold between July 1, 2007, and the date the Legislature approves it.
The increases will hold at that level even if tuition goes up by more than that amount.
The increases are being sought to minimize the impact of students who would be exempt under a proposed tuition law that seeks to allow all state universities to raise tuition by 15 percent each year until they reach the national average.
Students with prepaid tuition plans would be exempt from the potential tuition hikes, but Thursday's agreement would force the prepaid program to cover a portion of the increased tuition costs for some of those students.
The agreement does not affect students and their families, Edmonds said. "This will not cost parents a single dime," he said.
It will also not affect the prepaid program much, he said, because it currently expects an annual return of at least 6.5 percent on its investments, enough to cover the increase.
Stanley Tate, the founder of the prepaid program, expressed his opposition to the proposed increases in tuition at the meeting.
He said the increases, which will cause prepaid tuition plan prices to rise, will put the plans out of reach for families with lower incomes.
"We're gonna do whatever we can to fight it," he said.
Board of Governors member Charlie Edwards was unappreciative of Tate's comments.
"Mr. Tate's comments really had absolutely nothing to do with what we're discussing," Edwards said.
"His position has been well known for many, many years - the cheapest system the better, the heck with quality," he said.
In 2007-2008, about 12,500 UF students had a prepaid tuition plan, according to Rick Wilder, UF's associate director of Financial Aid Advising.
