Florida – Saving For College in 2023
As parents, grandparents and students, we know college is coming and that we're somehow going to have to pay for it someday. Fortunately, we have many options available to us, including savings bonds, the stock market and 529 plans. Starting a 529 account now is always the best option, no matter how old you (or your child) is. While playing the stock market may yield higher returns on your investment, placing your money into a 529 plan allows it to grow in a tax-free environment. One study even found that when the federal tax benefits were taken into consideration, 529 plans outperformed their benchmarks in every category.
Florida has its own state-operated 529 plan called Florida 529 Savings Plan. It is important to note that your child does not have to go to a FL college or university to use this savings account. 529 plan funds can be used at any accredited college or university across the nation, including some K-12 private schools!
Florida College Costs & Trends
Colleges and universities across the United States experienced increased operating costs of 2.5% in 2019. This most recent inflation figure was down slightly from the 2.9 percent increase in 2018 and 3.4 percent increase in 2017. These costs are forwarded directly to students in the form of higher tuition and living expenses. As these costs steadily rise every year, parents are investigating how to help offset these future higher education costs.
These rising costs are hitting closer to home in Florida as well. Florida's higher education costs rose by 59.9% in just the last 10 years, ranking as the 8th highest state.
The table below shows the average one-year costs last year (2022) for different types of Florida colleges and universities.
| Ownership | Degree | Schools | Public Out-of-State Tuition | Public In-State Tuition | Median Debt | Total Annual In-State Cost |
|---|---|---|---|---|---|---|
| Private | 2 year | 172 | $11,085 | $11,085 | $8,635 | $21,118 |
| Private | 4 year | 96 | $23,812 | $23,811 | $24,285 | $23,279 |
| Public | 2 year | 52 | $10,758 | $2,991 | $9,639 | $10,505 |
| Public | 4 year | 39 | $13,161 | $3,739 | $12,167 | $8,269 |
These costs rise every year. Rising tuition is a major driver of these increased higher education costs. Tuition at a 4-year university in FL rose 0% (ranked 50th in the US), while a 2-year or trade school increased their tuition by 2 percent.
529 Tax Benefits for Florida Residents
Florida offers tax benefits and deductions when savings are put into your child's 529 savings plan.
Unfortunately, Florida does not offer any tax benefits for socking away funds in a 529 account for your child. Thankfully, FL residents can open an account in any other state that lets them.
Best 529 Plans in Florida
Florida offers a prepaid tuition plan and a 529 savings plan, both which have Florida residency requirements. The Stanley G. Tate Florida Prepaid College Plan is the largest prepaid plan in the nation. It is unique among contract-type prepaid programs in offering a dormitory option in addition to its various tuition and fees packages. The Florida 529 Savings Plan is a board-managed 529 college savings program that hires outside investment managers to separately manage the program’s portfolios.
| State Plan Name: | Florida 529 Savings Plan |
|---|---|
| Minimum Contribution: | $0 |
| Maximum Contribution: | up to $418,000 across account per beneficiary. |
| Fees: | There’s an asset management/administration fee of up to 0.75% (annualized) of the account balance, depending on your elections. |
Florida 529 Plan Statistics
There are 594,420 registered schools in Florida with a total value of $13,301,264,531. That is an average of $22,377 per account. Unfortunately, 529 plans are not widely used... a 2018 study by Edward Jones found that only 29 percent of Americans were even aware that 529 savings plans exist!