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| Prepaid Tuition Plans |  With the help of prepaid tuition plans allow parents, grandparents and others can prepay tuition at today's tuition rates at eligible public and private colleges or universities so that they don't have to worry about future tuition increases.
• Contribution Limits
You pay for amounts of tuition (years, credits or units) in one lump sum or through installment payments. A number of options are available. Some plans propose contracts for a two-year community college or a four-year undergraduate program, or a combination of the two, and can cover one to five years of tuition. Some prepaid tuition plans even allow the contract to be applied to graduate school tuition.
• Covered Educational Expenses
However, with only a few exceptions, most prepaid tuition plans do not cover other expenses, such as room and board. That’s why you may want to consider other college savings options to cover these costs.
 • Guarantees and Safety Features
A lot of states guarantee that the funds you put into a prepaid plan will keep pace with tuition. There are states that back their prepaid tuition plans by the full faith and credit of the state, meaning that if the program should find itself in financial difficulty, the state will step in to provide the necessary funding. The rest of states do not have a formal guarantee, but do have a formal process by which the state's legislature will consider making an appropriation if necessary. There are also states that offer no guarantees that the plan will fund the future cost of tuition or that the state will step in should the plan falter.
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