Methods of Funding College Tuition

  • 5,809,484, September 15, 1998. Method and apparatus for funding education by acquiring shares of students future earnings
    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.
  • 4,752,877, June 21, 1988. Method and apparatus for funding a future liability of uncertain cost. This controversial patent includes the "invention" of tying the return on a bond to increases in college tuition. According to, "College Savings Bank has been issued three patents in connection with the design of the CollegeSure CD (patent numbers 4,839,804, 4,752,877, and 4,722,055). According to the July 10, 1995 issue of the Wall Street Journal, College Savings Bank filed a patent infringement lawsuit in New Jersey Federal Court in January 1995 against the state of Florida for allegedly infringing on one of the patents. (Congress removed the states' exemption from patent law in 1992.)" This is a June 30, 1998 opinion in the litigation involving the Florida Postsecondary Education Expense Board, and this is the abstract from Patent No. 4,752,877.
    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.

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