Question about Bright Futures and Florida Prepaid College

We were lucky enough to lock in with Florida Prepaid back when the kids were 3 years old. As it turns out S18 is smart and hard working enough to get the top level of the Florida Bright Futures Scholarship also. We only paid for the Tuition portion of the prepaid because back when we signed up there was no Differential plan or fees plan.
So I guess my question are what kind of money am I looking at putting out each year in addition to the Prepaid I’ve already paid for?
Also do they take my prepaid money prior to giving the bright futures, and if so why would I even tell them I have prepaid?
Any answers or further explanation would be appreciated.
I have paid for only 1 year of Dorm also and am hoping some of the excess money can go in an account to go to food and housing or additional years.

@candyce1

I think got the answer to this at Preview yesterday.

Prepaid is allocated first. However, it was noted that the Prepaid Tuition plan will not cover ALL of tuition as there are fees that UF adds that Prepaid will not cover. The goods news is Bright Futures is basically a big check that will cover everything else, to the limit of the Bright Futures award amount. So the amount of Bright Futures award amount is tied to the number of credit hours taken that semester, but if tuition is covered by Prepaid or an outside scholarship the funds are free to pay other expenses. If there is access it will be refunded to the student’s checking account.

We do not have the prepaid plan, but my D has a small outside scholarship that can only be used for tuition, so she is in a similar situation. Since I tend to be complusive I created a color coded spreadsheet to to cross reference the costs with the source of funds as my D also has a 529 plan that has restrictions (can pay for a computer but not a phone, can buy books but not clothes).

How much will you need to put out?
Basically look at the COA as one big cost, for my D it will be about 21K a year.
Subtract the amount Prepaid will disburse
Subtract the BF disbursement (hopefully it remains full tuition plus $600 for books* next year)
The rest is on you.

So if the newly restored BF stays intact for the coming years, the amount of the Prepaid disbursement will essentially be available for food. housing or carried forward since it will be the amount of the BF excess. Hope that makes sense.

Perhaps someone who has a student that already has a couple years under their belt can better estimate how much your Prepaid will disburse and correct any misstatements I might have made.

*The $660 does not need to be used for books, it can be used for anything.

the total cost of tuition and fees per credit hour is about $212, which breaks down approximately as follows:

$105 - tuition
$45 - tuition differential fee
$62 - other fees (health, activities, etc)

if you bought the prepaid tuition plan prior to 2007, you are exempt from paying the tuition differential fee. Prepaid will pay the tuition portion and you are responsible for the balance of the fees. So a student taking 15 credits will have to pay about $900 total.

Assuming the student gets the top Bright Future funding level which hopefully will pay 100 percent of tuition and fees this Fall, then the student taking 15 credits would get a little over $3000 per semester plus the $300 book stipend. Subtracting the $900 or so for fees, you would have about $2400 left over to apply toward housing, meal plan, or getting it back as cash to your account. Since you have the prepaid dorm as well, you could get the money applied to a meal plan and still get the leftover cash to your account.

Thanks , both of you so much. Yes we bought before 2007 so we are exempt from differential fees, thank goodness. After checking out traditional dorms, I guess we’ll be using the surplus towards suite style or private. Lol thanks again. I was thinking if we didn’t use the prepaid he could use it for grad school but I guess not.

Yes, in your situation (which is similar to our families), it’s best to use prepaid as it causes UF to discount the tuition (by not including the differential fee).

Oh, so then I’m getting more of the BF money in the end.? I was worried BF would only give him what prepaid didn’t cover.

This is how BF works at UF (and this is the UF forum, so assume you are all talking UF). But be careful. I assumed the BF was always available to be refunded to the student. Actually BF allows the schools to decide and not all schools are willing to hand the money to the students. The schools can decide how they will allow you to use the money - for tuition only, for study abroad, for anything.

Of course, my kid is at a school that only allows it to be used for billed costs. They won’t give it to her for room and board now that she lives off campus, but do allow it to be used for anything billed.

@RCGator It’s going to pay 100% tuition this fall, but only for this year. The bill got vetoed by Rick Scott, but since the funds were already allocated for the state budget, they just decided that this year it would cover full tuition.

It might get renewed next year, but until then, it’s safe to assume that BF will return to normal 50% coverage.

That’s sad and makes it difficult for planning and even determining the best route as with it being 100% a Florida school looks way more desirable than some great OOS schools that offer full tuition but at half so it’s back in the air.
I guess the Beniquisto recipients are even worse off as they know its a full ride for 17-18 but what about the future. yikes

@candyce1 Very few public schools at the level of UF offer full tuition to OOS students, so that problem probably isn’t that common. Schools like the UCs rarely give full aid, and I know UVirginia didn’t give my friend with a 4.8 UF GPA/1530 SAT anything close to a full ride. I could be wrong, but I doubt FSU gives out that many OOS full-ride scholarships as well.

For most people, even if UF only gives 50% Bright Futures, it’s still more affordable than going OOS. I’d take 3k/yr tuition over a 20,000 scholarship to an OOS school any day. With Florida Bright Futures/Prepaid, going to UF is still extremely affordable compared to my other options.

OOS Tuition at these schools can cost up to 45k a year in tuition alone, so if you are even qualified enough to get a college to pay you that much each year, you probably wouldn’t look at schools like UF.

Oops, forgot to add this

And the Beniquisto recipients will keep their scholarships as long as they were in-state. The bill wasn’t introducing full-rides to them, it was proposing that OOS students who are NMF could qualify for that scholarship as long as they designated UF as their first choice.

The bill was only talked about a few months ago, and it was never confirmed that it would pass. By the time we all thought it would, every college confirmation deadline had already passed, so I don’t think anyone OOS committed to UF on the basis that they would get a full-ride as a Beniquisto scholar.

I have two questions:
If there is extra cash in the account, can that be withdrawn?
Does anyone know how it works if you have prepaid, bright futures and another outside scholarship?
Thank you!

@968Mom After prepaid pays (first), then BF pays. Any extra $ from BF gets deposited into your bank account (make sure you have this setup). You can spend that extra BF funds on pretty much anything.

I’m not sure how an outside scholarship would work, I think it’s based on the outside scholarship details. We’re working through the details now on one for my UF21 son, it looks like they pay the university directly with no mechanism to have the $ overflow into the checking account (Like BF).

Since the future of the full tuition Bright Futures is uncertain after summer 2018, it would make sense to take courses next summer since they would be paid for. (since you have to take summer coursework at SOME point, anyway, why not take it when it’s paid for?)

@Gator88NE Thank you! @Trisherella does Bright Futures pay for 3 semesters in one year?

How does this work as far as taxes go? If Florida Prepaid is being used for tuition, what is the tax status of the BF money received?
In other words-

Are BF disbursements taxable if they are used for housing and room and board?

Because if they are, it would make more sense to use BF for the tuition and apply the PP money to housing and/or room and board. This is because PP is another form of 529, and 529 disbursements are not taxable if they are used for qualified expenses (like housing and room and board).

I believe any scholarships earned that cover something other than tuition are taxable income.

But if this new GOP tax plan passes, you probably won’t have to pay taxes on your room and board scholarships, unless they exceed 12k/year.
(New standard deductible of 12k).

Right, Bright Futures is a scholarship, so it should be taxable if not used for tuition. Let me clarify my confusion.

If a student has Florida Prepaid, the UF financial office normally applies the Prepaid money to the student’s tuition, then disburses a check for the Bright Futures money, which the student can use for anything. (My son jokes “How about beer and women?”)

My question is essentially: Wouldn’t it be better if the BF money went for tuition, and the Prepaid money was shifted to room and board? BF is taxable if it is used for room and board, while Prepaid (being a 529) is not taxable if used for room and board. So why not do it that way? The UF default is the other way around and doesn’t make sense. As I understand, it is possible to “opt out” of Prepaid and not have it disbursed for tuition. But that’s something the student or parent would have to step in and do-- it’s not the default mode.
Am I right in my thinking about this or is there something I’m missing?

Keep in mind that all 4-Year University and 2 + 2 Prepaid Plans purchased before 2007 are exempt from paying the Tuition Differential Fee. By applying PP first, you avoid the Tuition Differential fee, which is significant. In fact, UF currently charges $212 an hour for instate students, of which more than 50% are fees (with the Differential fee being $44). Avoiding the differential fee is usually better than any possible tax savings.

Tuition $105.07
Tuition Differential $44.17
Capital Improvement Trust Fund $6.76
Student Financial Aid $5.25
Technology Fee $5.25
Activity and Service Fee $19.06
Athletic Fee $1.90
Health Fee $15.81
Transportation Access $9.44
Total Florida Resident Rate/Credit Hour $212.71

Example, lets say the student takes 30 credit hours (15 a semester) in one year.

30 X $212 per credit hour = $6,360

PP (lets assume it’s the tuition only version and doesn’t pay fees, note that even the version that pays “fees” doesn’t cover the differential fee) would pay out:
30 X $105 = 3,150

That’s leaves you with $3,210 (of which !,320 is the differential fee). Then BF would pay out, and the surplus would be deposited in your bank account.

However, if we apply PP first, then we’re not charged the $1,320 for the differential fee. UF would only charge $5,040 ($6,360-1,320). After PP pays out, you only owe 1,890 (less if your plan also covers some of the other fees). Then BF pays out and the savings are deposited into your account.

In addition, Prepaid covers the Capital Improvement and Student Financial Aid Fees. These are considered part of Tuition and according to this link, are covered. http://www.myfloridaprepaid.com/using-your-plan/all-about-fees/