Florida Prepaid College Board

Dear Plan Participants,

In the recent back to school College Bound newsletter, the Chairman of the Florida Prepaid College Board informed you that due to our conservative investment strategy, the funds invested on behalf of the Florida Prepaid College Plan have not suffered from the recent sub-prime mortgage crisis or the negative swings in the equity markets. Over the past week, several additional events have occurred that have negatively impacted the financial markets. As you probably read in your local newspaper or heard on the national news, the markets continue to experience significant volatility.

With the vast majority of the Prepaid College Plan’s assets invested in safe government-backed fixed income securities, you should have peace of mind knowing the total fund is safe and secure. As of June 30, 2008, Ernst & Young, the Board’s independent actuaries, reported that the Plan’s assets exceeded the plan’s liabilities by $775 million, which represents a positive actuarial reserve of 10.3%. Additionally, the Prepaid College Plan is financially guaranteed by the State of Florida, so you cannot lose your money.

If you are a participant in the Florida College Investment Plan, you know your investment returns will fluctuate, and are not guaranteed. Overall, the underlying equity portfolios included in your investment options have been impacted by the swings in the equity markets, but the direct impacts resulting from events such as Lehman Brothers bankruptcy filing and the significant drop in AIG’s stock market value were lessened due to the portfolios’ minimal exposure in these securities. Specific impacts will vary based on your account’s asset allocation.

If you have any questions or would like additional information, please call our customer service center at 1-800-552-GRAD (4723).

The promise made when you purchased a Florida Prepaid College Plan that you locked in today’s tuition plan prices for tomorrow’s college education was kept by Governor Charlie Crist and the 2007 Legislature.

Governor Crist on June 27 signed into law a tuition differential fee approved by the Legislature, but the law exempts families that currently have either a Prepaid University Tuition Plan or a University plus Community College Tuition Plan contract from paying the fee now or in the future.

Crist said he was taking this action with the understanding that universities would wait until fall 2008 before implementing the new fee.

Newly enrolled students at University of Florida, Florida State University and University of South Florida will be charged the tuition differential fee authorized in Senate Bill 1710. During legislative deliberations, many families with Prepaid Plans contacted their legislators to express concerns about the state of Florida standing behind its Prepaid Plan guarantee. Lawmakers responded by amending SB 1710 to exempt current Prepaid Plan customers holding either a University Tuition Plan or University plus Community College Tuition Plan contract from paying the tuition differential fee.

The tuition differential fee may be as much as 40 percent of regular tuition at the University of Florida and Florida State University and up to 30 percent at University of South Florida, though overall tuition at these universities can increase no more than 15 percent a year. The additional revenue generated by the new fee will be used to hire faculty and academic advisors.

Governor Crist earlier vetoed a separate 5 percent tuition increase slated to take effect in the 2007-08 academic year.

Current Prepaid Plan families should feel secure. Governor Crist and the Legislature have kept the Prepaid Plan promise.