parents to prepay their children’s fees

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A program instituted in a particular state allows parents to prepay their children's future college tuition at current rates. The program then pays the tuition annually for the child at any of the state's public colleges in which the child enrolls. Parents should participate in the program as a means of decreasing the cost for their children's college education.
Which of the following, if true, is the most appropriate reason for parents not to participate in the program?
(A) The parents are unsure about which pubic college in the state the child will attend.
(B) The amount of money accumulated by putting the prepayment funds in an interest-bearing account today will be greater than the total cost of tuition for any of the pubic colleges when the child enrolls.
(C) The annual cost of tuition at the state's pubic colleges is expected to increase at a faster rate than the annual increase in the cost of living.
(D) Some of the state's public colleges are contemplating large increases in tuition next year.
(E) The prepayment plan would not cover the cost of room and board at any of the state's public colleges.


Please explain in option A and B.

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by tpr-becky » Fri Jun 25, 2010 1:36 pm
The conclusion is parents should participate to reduce their future costs so an answer that weakens it will say that participating may not reduce future costs

(A) The parents are unsure about which pubic college in the state the child will attend. - this is OK because as long as the college is in state they will save.
(B) The amount of money accumulated by putting the prepayment funds in an interest-bearing account today will be greater than the total cost of tuition for any of the pubic colleges when the child enrolls. This is the answer because it says if they put the same money in the bank they would have more than the cost of tuition - thus they would not save any money.
(C) The annual cost of tuition at the state's pubic colleges is expected to increase at a faster rate than the annual increase in the cost of living. This means you should participate becuase you pay current rates and thus will save as rates rise.
(D) Some of the state's public colleges are contemplating large increases in tuition next year. See answer for C above
(E) The prepayment plan would not cover the cost of room and board at any of the state's public colleges. But it would still save money on tuition so this is Ok
Becky
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