|Methods of Funding College Tuition|
A data processing system and method for administering a plan for funding investments in education is provided. The education investment plan includes a unit investment trust for financing the educations of a predetermined number of students pursuing careers in preselected fields of study. The data processing system selects students for participation in the plan by comparing their application responses in various categories, weighted according to a predetermined weighting scheme, to stored weighted criteria for the same categories. The education of accepted students is paid for by funds invested in the plan by investors. The students agree to assign a percentage of their future income for a limited time period to the plan, generating a return for the investors. Students are monitored throughout their education and employment until their obligations are discharged, with the results of the monitoring used to adjust, as necessary, the acceptance criteria. In order to offer the plan, plan earnings are projected based on multiple variables, and the projection may be performed according to statistical equations, or may be performed iteratively with a different variable varied during each iteration.
A method and apparatus are provided to fund a certain future liability of uncertain value and thereby defease fully its future cost. The method is an insurance investment plan which can be implemented using a floating rate zero coupon note obligation the interest rate on which varies automatically with the rate of inflation or the cost of some specified service or commodity which gives rise to the future liability, and the interest payments on which are automatically reinvested. The system projects the expected future cost of the liability based on a projected escalation rate associated with a certain specified index and based also on when the liability is expected to come due. It then calculates the present value sale price on the floating rate zero coupon note by discounting the expected cost at maturity at a rate that represents the insurer's projected reinvestment yield net of an insurance risk premium.