Good Day Everyone,
Some years ago we opened a Maryland Prepaid College Trust account for our son and paid a lump sum to cover 4 years (or tuition and fees) at a MD state university. Our son is about to start his freshman year at UMD. Once we got our first bill, I contacted MPCT and asked them for the roll-over amount that I would get if I decided to close the account and roll it over to some other 529. The response I got is puzzling: the amount I would get if I roll over would be by several thousand $s MORE than the total payout from that trust in 4 years, if I assume about 3% yearly increase in tuition and fees which is has been about average over the last 6-8 years. In fact, T&F would have to go up by something like 11% every year for the 2 amounts to be about the same which is probably quite unlikely.
I realize that investing in MPCT is a risk mitigation method but the difference between these two numbers is just too big!
So unless UMD does get that much more expensive in the next 4 years and/or the stock market crashes terribly, it seems to be a complete no-brainer: I have to close this account ASAP, roll over the funds to an investment 529 and invest it into some conservative portfolio.
Am I missing something here?