Why the Maryland Prepaid College Trust?
Here’s how it works:
The Prepaid College Trust is a pooled fund similar to a defined benefit plan. You are purchasing a contract that will pay a specific benefit (Tuition) in the future. The Trust will invest your payments to fund the Beneficiary's future Tuition payments.
Prepaid College Trust Contract prices include certain assumptions about Tuition increases and investment earnings. Because the Trust has promised to pay future Tuition costs, even if Tuition increases are greater than expected, or investment earnings are lower, the Trust still pays the Tuition benefit. Contributions from all Accounts are pooled and collectively invested, so Accounts do not have a daily value as you would in an individual investment account. The investment returns attributable to an Account are only determined at the time of a distribution.