Families across the state got a big surprise Monday, as Gov. Ron DeSantis announced $500 million in cash refunds to those who have used the state-backed Florida Prepaid program to send their kids to college.
The price reduction will affect 224,000 accounts dating back to 2008, and about 108,000 of those will now be paid-in-full, DeSantis said. The average payout will be $4,700.
Families still paying into the program will see decreases in their monthly payments, the governor’s office said. At the same time, prices for new Florida Prepaid plans will drop to the lowest level in five years, starting at $44 a month for a one-year plan.
Altogether, there will be $1.3 billion in savings to Florida families who receive refunds and lower rates, according to DeSantis.
About 42,000 of the families impacted live in and around the Tampa Bay region, said Florida Prepaid spokeswoman Shannon Colavecchio. About half will receive refunds that make up about one-fifth of the total refund amount.
During a news conference at Florida State College at Jacksonville, DeSantis said the changes “will enhance Florida’s legacy as a nationwide leader in affordable post-secondary education” and help state residents avoid “debilitating debt.”
The news comes after a review of college costs over a succession of recent years by state financial experts, Colavecchio said. The Florida Prepaid program had upped the prices of its plans in anticipation of rising tuition and fees, but those costs did not grow to expected levels.
The seven-member Florida Prepaid board held a vote to roll back plan prices last week. Members review the rates annually, considering three factors — current and anticipated future costs of tuition, and projected return on investment — to determine whether adjustment is needed.
“What they saw was in the past six years, tuition has essentially not moved,” Colavecchio said. “It’s a trend we can count on.”
Florida Prepaid is a college savings plan, backed by Florida’s state government, which allows families to make regular payments toward their child’s future attendance at a college or university. It locks in the price of tuition to the year a plan is purchased and can be used in-state or out-of-state.
Response to news of the savings was quick and overwhelming as parents across the state tried to get more information, causing delays on the Florida Prepaid website and tying up phone lines at the customer call center, Colavecchio said.
One was Caroline Burgess Nelson, a mother of one from Clearwater. She got an email Monday morning: “We have lowered your Prepaid Plan price!" It included a message from DeSantis, who noted his efforts to keep college tuition costs low in Florida.
Nelson immediately tried to log in to her Florida Prepaid account online but couldn’t remember her password. She clicked an option to be sent a new one, but nothing ever came through.
“I’m sure everyone is trying to log in right now,” she said.
St. Petersburg flight instructor Barbara Hedge also couldn’t get into her online account after receiving a similar email about a refund. She paid off plans for her three children when they were younger and was eager for more details after the governor’s announcement.
She tried the site for a half-hour, then opted to call the office instead. “It didn’t matter what option I picked, the line was busy," she recalled.
Though frustrating, the delays didn’t much surprise Hedge. She said she plans to wait until the excitement dies down, then try the website again.
Her hope is to reinvest the refund back into her kids’ educations because, while tuition is paid for, there are still dorms and meal plans and textbooks to think about.
Colavecchio said all affected families will be notified by the state this month, so they shouldn’t worry about delays online or over the phone.
“We are thrilled that customers are excited, but we do appreciate their patience,” she said. “The delays will not affect their refund. It will be waiting for them."