Margo Johnson always saw the Florida Prepaid College Plan as too good to pass up — until this year.
Prepaid tuition already is sending her 22-year-old stepson to the University of South Florida and will pay for her 10-year-old son's college.
But things don't look so good for her 4-year-old twins Mackenzie and Mckayla.
Prices shot up this year, with the cost of one prepaid tuition plan more than quadrupling. "It blows my mind," said Johnson, 44, a St. Petersburg nurse.
The prepaid plan for a tuition rate charged by universities — one that is expected to rise year after year — shot from a lump-sum payment of $4,614 for a newborn infant last year to $19,776 this year. And that's on top of the state's base tuition, which is also going up.
These increases come as the average cost of a college education races far ahead of inflation. Nationwide, in-state tuition and fees at four-year public universities now average $7,020, an increase of 6.5 percent over last year, according to the College Board.
"It's getting near a breaking point," said James A. Boyle, president of the nonprofit College Parents of America. "Schools really see no reason to lower their prices or keep their prices steady because they see this lineup of people who want what they're selling, a college degree."
This year's enrollment period for the Florida prepaid program started Oct. 19 and continues through Jan. 31.
The steep price increases now shocking parents are meant to keep up with anticipated future increases in tuition and fees, said Susan James, director of external affairs for the Florida Prepaid College Plan.
Those price increases also reflect a fundamental shift taking place in who pays for higher education in Florida. As the Legislature cuts state support to universities and universities raise tuition, more of the burden of paying for college will fall on students and their families.
Florida's tuition is the 49th lowest in the nation, and legislators have begun allowing the state's 11 universities to charge a "differential" tuition on top of the state's base tuition.
Starting this year, those two rates can increase tuition by up to 15 percent a year until Florida's tuition reaches the national average. (Previously, the differential tuition rate had been capped at 40 percent of regular tuition.)
"There's going to be a catch-up phase," James said. "Obviously, we have a ways to go because we're so behind the national average."
As tuition goes up, the prepaid tuition program expects to increase its prices to keep up. This year the biggest increases are in the prices for the differential tuition plans, where the one-time price for a newborn plan hit $19,776.
Relax if you bought your prepaid plan before Jan. 31, 2007. You are exempt from the tuition differential fee.
Over the past 21 years, prepaid tuition has become enormously popular. More than 917,700 children have been enrolled in the program. Officials say one in 10 Florida children, from newborns to high school students, has a prepaid plan.
With money getting tight, more parents are not buying a lump-sum plan, but instead are choosing one of the prepaid program's two monthly payment programs. The state also has a 529 college savings program, which offers tax advantages, for families who choose not to buy a prepaid plan.
Despite the price increases, James said Florida's program is "still a great way to prepay the cost of college tuition." Still, she acknowledged that the big jump in the price of the tuition differential plan comes as a shock to many parents.
"Obviously, I think it's going to be a challenge for folks who are having children now to figure out how they're going to save for their child's education at a four-year university," James said.
It used to be easier, Margo Johnson recalls.
Starting in 1992, she and her husband, James, spent less than $7,000 on prepaid tuition and school fees plans for her stepson Khristopher, now a junior at USF.
The couple also is paying a total of about $58 a month on a 2+2 tuition plan — two years of community college, followed by two years at a university — and a school fees plan for their 10-year-old son Tucker.
But the prepaid plans' cost has risen well beyond the point where they can afford one for their adopted twin girls.
They thought about starting plans for the girls, too, but had those conversations as they saw their household finances squeezed as James Johnson's pay and bonuses were cut at his job as an MRI technologist.
"I'm just thankful that I've got what I've got out of it," said Margo Johnson, a registered nurse in the organ transplant field. "But I know it's an option that we're not going to be able to afford anytime in the near future for the girls."
So, for the moment, they are putting money in a savings account for the girls, though Johnson said she is aware of the tax advantages available through a 529 college savings plan offered by Florida and other states.
Dental equipment salesman Kai Cox of St. Petersburg said he was "really kind of blown away by the cost" when he checked Florida prepaid prices last week.
Cox, 32, already was leaning more toward investing in a 529 college savings plan for his 15-month-old son, Finnegan. Still he recognizes the appeal of using a prepaid plan to lock in the expense of a child's education and says "even 20-grand over four years is still a hell of a bargain for college."
But he said this year's big prepaid price increases are "unfortunate for the people who don't have the means to pay the difference."