Final answer:
A plan that locks in tuition prices at colleges and universities is called a prepaid tuition plan, allowing families to pay for future tuition at current prices, which helps manage rising tuition costs and student debt.
Step-by-step explanation:
A plan that locks in tuition prices at eligible colleges and universities is known as a prepaid tuition plan. This type of plan allows families to pay for future college tuition at current prices, thus providing a hedge against tuition inflation. They're often operated by state governments and can be a strategic part of college financial planning. Prepaid tuition plans can be especially attractive to those concerned about rising costs of college education, like the group of college students in Michigan. Such plans can contribute to financial security after college by preventing large student loan debts.
It is important to research all options early on, as part of your plan on how to pay for college. In addition to looking into grants and scholarships, families should consider the potential benefits of prepaid tuition plans as part of their savings strategy. Behavioral economics suggests that plans which require proactive enrollment, like many 529 plans, may benefit from more automatic enrollment features to encourage greater participation and savings.