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Texas Payroll/Personnel Resource

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Texas Prepaid Higher Education Tuition Program

Certain prepaid tuition or college savings contracts can be paid through a payroll deduction. The Texas Prepaid Higher Education Tuition Board (Board) administers the Texas Tomorrow Funds program, which includes the following IRS Code Section 529 plans:

  • Texas Guaranteed Tuition Plan (formerly the Texas Tomorrow Fund)
  • Texas Tuition Promise Fund
  • Texas College Savings Plan
  • LoneStar 529 Plan

Texas Guaranteed Tuition Plan

The Texas Guaranteed Tuition Plan is a plan administered by the Board that allows individuals to prepay college tuition and required fees at Texas public two- and four-year colleges and universities at today’s cost. The plan can also be used at Texas private colleges and universities, as well as eligible out-of-state colleges and universities.

The Board invests payments received from plan participants and uses the investment earnings and purchaser payments to pay college tuition and required fees for plan beneficiaries in accordance with their plan benefits.

Note: While this fund was closed to new enrollment in 2003, state employees may have existing accounts with authorized payroll deductions.

For more information, see the Texas Guaranteed Tuition Plan.

The Texas Tuition Promise Fund

The Texas Tuition Promise Fund is a prepaid tuition plan that opened in September 2008. It allows individuals to lock in the cost of undergraduate resident college tuition and required fees at today’s college prices.

With the Texas Tuition Promise Fund, an individual buys tuition units that represent a fixed portion of resident undergraduate tuition and required fees (1 unit = 1 percent of a 30 semester-hour academic year). Participants must purchase a minimum of one unit to establish an account. After that, contributions can be as little as $15 per payment.

The Board invests payments received from plan participants and uses the investment earnings and purchaser payments to pay college tuition and required fees for plan beneficiaries in accordance with their plan benefits.

For more information, including enrollment periods, see the Texas Tuition Promise Fund.

Texas 529 College Savings Plans

Texas College Savings Plan

The Texas College Savings Plan is a qualified 529 college savings plan offered through the state. The plan is a direct-sold plan, meaning that individuals can purchase a contract directly without having to go through a financial advisor.

The plan offers a number of different investment portfolios. Growth and withdrawals are tax-free if used for qualified higher education expenses. New applications and investments in the plan are accepted year-round.

For more information, see Texas College Savings Plan.

LoneStar 529 College Savings Plan

The LoneStar 529 College Savings Plan is another qualified 529 college savings plan offered through the state.

The plan is sold through financial advisors only. The plan also offers a number of different investment portfolios. Growth and withdrawals are tax-free if used for qualified higher education expenses. New plans can be opened year-round.

For more information, see LoneStar 529.

Source

Texas Education Code, Chapter 54, Subchapters F, G and H.