Terms to Know Prepaid Tuition Plans- Families are able to pre-purchase credits at public, in-state universities at grandfathered rates. These credits can be counted to tuition costs, but generally not room and board. While these plans are not guaranteed by the federal government, they are often guaranteed by the state government. If the plan is not guaranteed by the state government, families may lose money in the case of the sponsor’s adverse financial circumstances. These plans are also tied to specific eligible schools, so if the beneficiary does not attend participating institutions, they may receive less in tuition payments and so there is less value in using a prepaid tuition 529 plan.