User:Urnbullrooki

As I have written before, however, prepaid plans are not as risk-free as they appear. While all but one of the prepaid 529 plans on the market are sponsored by states, not every state with a plan has backed it with the full faith and credit of its treasury. Of the 18 states that offer prepaid 529s, just Florida, Massachusetts, Mississippi, Washington and Texas offer an unconditional guarantee. As a result, many participants are unknowingly gambling on the hope that, if their plan ends up without enough cash, the state government will voluntarily offer up the necessary funds. Given many states' overall financial difficulties, that's not a very attractive bet. Even in states that include solid guarantees, future legislation could change the plans' features and benefits, or restrict new contributions.

While plans would ideally fund themselves, there is a real chance that many prepaid 529 programs will find themselves at the mercy of legislators as a result of higher than expected tuition increases and worse than expected investment performance. More than half of state plans are currently underfunded, according to data from the College Savings Plans Network, a nonprofit association that advocates 529 plans.