Tennessee State is putting an end to a program which has been in vogue for over two decades now. This program helped many parents to prepay for college education for their children. The program is known as the Baccalaureate Education System Trust or BEST in short. The program was started in the year 1997. The board of BEST has voted for terminating the program as it is not being able to sustain the program financially. The department of treasury of the state has announced that the termination will take effect from November 30th this year.
This program had been started on the principle that, parents could prepay for a child’s college education as per the tuition fees that the program predicted for a future period as per public college rates in the state. The board then found that the officials had incorrectly predicted the costs and annual tuition fees have risen much more than what was forecasted. The return on investment of the fund that was created did not appreciate as it was expected. Hence, the program is no longer financially viable.
There are certain students who will still be covered by the program. There are students who have already enrolled in college based on the program. The program has also been invested by parents whose kids will graduate from high school by November 2018. Hence, these students will still continue to use the BEST plan. The others who have invested for a later date will be able to roll their money over to other eligible plans. In case that is not possible, refunds would be provided to the parents who have invested till date. However, the refund would be subject to taxation as appropriate.
For the BEST customers who come across this piece of news, they can register at the site in order to gain relevant information about their investment status and the fate of their beneficiary in light of the board’s action plan as mentioned above.
Indeed, many states are struggling with financial plans that were started in order to help subsidize or reduce the burden of college education on minors or their parents. The way the funds are invested and returns generated also influence the success of these plans. BEST might be seen as an example of how predictions have gone wrong of the board managers when they predicted the college education fees and allowed in investment by parents. The factors that are considered to predict college education fees also need to be scrutinized.