Pre-Paid College Tuition Plans

Some states and educational institutions offer “pre-paid tuition plans,” which involve the prepayment of college expenses at the current prices for a student’s future attendance. These prepaid plans are typically structured as contracts in which the investor purchases tuition credits or certificates directly from the state or institution. These credits are later applied to the cost of college when the student actually attends college. Dealers are rarely involved in these arrangements and pre-paid tuition plans generally are not considered municipal securities or subject to MSRB rules.