Planning ahead is essential in all things financial. Many families are seeing great benefits planning ahead when it comes to college as well. Is this something to pay attention to? Planning for babies to go to college? Why would parents make a decision to pay for college in advance? We rarely order meals in advance, and never buy 10 -year-olds a car, so why would we buy a university experience for a baby? Prepaying for college has many advantages. Florida Prepaid College Program has just hit its 30th birthday and has helped almost 500,000 children make their college dreams come true.
Read the article attached and think about the following: Why do parents make the decision to pre purchase college for their children? Does it make a difference? Support your conclusion. What could parents do instead of choosing to invest in college for their baby? Would you consider the FPCP an investment? Is it risky to participate in this program? Does the Florida Prepaid program mean that college students will not accrue student loan debt? What happens if the child fails to attend college? What impact would it have if double the parents participated in Florida Prepaid? Would this change the job market for college graduates?
Take your findings and write a letter to a parent of a newborn explaining the program, providing costs and benefits and conclude with an “advisement” to parents regarding their decision to participate in the Florida Prepaid program.
Extension: Create a short PowerPoint or Prezi to compare the cost of student loans with interest over time. Use the national average for student loan debt of $37,000. Investigate using the Florida Prepaid website how much it costs to invest in the program this year for a child born in January of 2019. Configure a chart to show how the same money grows over time in comparison to a bank savings account using the same dollar amount invested in FPCP. Add a slide to share what happens when graduates default on a student loan. What are the consequences if the loan is not repaid? What options are available specific to student debt?
SS.8.FL.2.1: Explain why when deciding what to buy, consumers may choose to gather information from a variety of sources. Describe how the quality and usefulness of information provided by sources can vary greatly from source to source. Explain that, while many sources provide valuable information, other sources provide information that is deliberately misleading.
SS.8.FL.2.3: Describe the variety of payment methods people can use in order to buy goods and services.
SS.8.FL.2.4: Examine choosing a payment method, by weighing the costs and benefits of the different payment options.
SS.912.FL.3.1: Discuss the reasons why some people have a tendency to be impatient and choose immediate spending over saving for the future.
SS.912.FL.3.3: Compare the difference between the nominal interest rate which tells savers how the dollar value of their savings or investments will grow, and the real interest rate which tells savers how the purchasing power of their savings or investments will grow.
SS.912.FL.6.1: Describe how individuals vary with respect to their willingness to accept risk and why most people are willing to pay a small cost now if it means they can avoid a possible larger loss later.
SS.912.FL.4.8: Examine the fact that failure to repay a loan has significant consequences for borrowers such as negative entries on their credit report, repossession of property (collateral), garnishment of wages, and the inability to obtain loans in the future.
SS.912.FL.4.9: Explain that consumers who have difficulty repaying debt can seek assistance through credit counseling services and by negotiating directly with creditors.
SS.912.FL.4.10: Analyze the fact that, in extreme cases, bankruptcy may be an option for consumers who are unable to repay debt, and although bankruptcy provides some benefits, filing for bankruptcy also entails considerable costs, including having notice of the bankruptcy appear on a consumer’s credit report for up to 10 years.
SS.912.FL.5.10: Explain that people vary in their willingness to take risks because the willingness to take risks depends on factors such as personality, income, and family situation.
Created by Deborah Kozdras and Brittany Sampson