The Texas Tuition Promise Fund allows for the purchase of tuition units that represent the cost of college today. These units can then be used on college courses when the student is ready to attend college. This allows the purchaser of the tuition unit to lock in today's costs of college. The Promise Fund is part of the state's 529 plan and is backed by the state of Texas. Tuition units can be purchased as pay-as-you-go, lump sum or installment plans.
The Texas Guaranteed Tuition Plan is similar to the Promise Fund as it uses money invested today to pay for credit hours and required fees at Texas colleges and universities at a later date. This plan takes funds deposited and invests them. The funds are overseen by members of the Texas legislature including the Lt. Governor. When the student is ready for college the funds will be there to cover applicable costs. The plan allows for prepayment of up to 160 hours of credit hours.
The state of Texas offers a Tuition Equalization Grant for students attending private, nonprofit universities. The grant, as of 2011, can pay up to $3808.00 per year. Requirements of the grant include completing 24 credit hours per year while maintaining a grade-point average of 2.5 on a 4-point scale. Students are required to complete the Free Application for Federal Student Aid to see if they qualify.
Each state has its own college savings plan. The Texas 529 plan allows for income earned from invested money to be tax deferred. Qualified withdrawals from the plan are tax exempt. The funds can be accessed and used for a wide variety of college cost related items and the owner of the account controls how the money is invested. All U.S. residents may invest in the Texas 529 plan whether they are a resident of the state or not.