Members of the board overseeing Florida's 11 public universities unanimously agreed Thursday on a plan they say would give needed resources to the schools while protecting the state's prepaid tuition program.
The agreement between the Board of Governors and the Prepaid College Board guarantees that the prepaid program will increase payments to universities by at least 6 percent but no more than 6.5 percent every year, even if tuition increases above those levels. The increased payments would be made on prepaid contracts sold from July 1, 2007, through final approval of the agreement by the Legislature.
Described by Board of Governors chairwoman Sheila McDevitt as a way to offer predictability to universities in uncertain economic times, the move comes in anticipation of tuition increases that will be discussed during the upcoming Legislative session.
Five universities already have been granted authority to exceed the base tuition set by the state, and legislation has been filed to extend that power to the rest.
Florida Prepaid allows families to pay for college tuition in advance at today's prices. Under the previous model, those who bought into Florida Prepaid had any tuition increases covered with no increase in price. With some of the contracts extending 24 years into the future, it would have been possible for a student to be enrolled in the university system in 2032 while paying tuition based on 2007 rates.
"It would be like going into the Toyota dealer and saying, 'Sell me that car at the 1984 price,' " Board of Governors spokesman Bill Edmonds said.
The board's overriding concern, Edmonds said, was that as tuition rose to give universities additional revenue, they would not be able to collect it from an entire generation of Florida Prepaid students. The difference could be as much as $2 billion the universities could use to educate students, Edmonds said.
The agreement is contingent upon approval by the Legislature.
Information from the Associated Press was used in this report.