Prepaid college tuition plans are no longer as economical, or as practical, solutions to divert runaway tuition costs as they once were.

Once a state-sponsored, savvy plan designed as a way to save for college by locking in at least a portion of future tuition at the day's prices, before prices increased, battered finances are now raising questions whether some plans live up to their promises.

A number of states have already shut down their plans or altered them as their deficits widen. Facing shortfalls, some have bumped up the prices by charging substantial premiums above the cost of current tuition.

Some important points to consider when looking into investing in prepaid college plans:

The Basics

A prepaid tuition plan allows families to buy future tuition units or credits at current prices. If you purchase shares worth one semester's tuition when your child is young, the shares should always be worth one semester's tuition regardless of how much rates increase. The credits can sometimes also be applied to room and board.

Most prepaid plans have residency requirements. Purchased credits can be applied toward a college in another state, but there's no assurance the full cost will be covered. If a student decides to attend a private or out-of-state college, the plans typically pay the average of in-state public college tuition, according to Mark Kantrowitz, founder of the financial aid site FinAid.org.

States invest families' money in the stock market and use their investment returns to pay for the tuition.

Available Plans

There are 21 prepaid plans offered in 19 states. But 10 states have closed plans to new participants. Among the 11 open plans, Massachusetts, Mississippi and Washington guarantee theirs with the "full faith and credit of the state," according to the College Saving Plans Network.

Pros

Advocates of prepaid tuition plans call them "peace of mind programs" and say they still offer that comfort.

Prepaid plans as a whole are 93 percent funded, up from 91 percent a year ago and that's more than adequate to assure future payouts, according to the College Savings Plans Network.

Cons

Some experts who once recommended the plans for new investors no longer do. They cite the increased risk that states won't make good on their original commitments and the chance that parents will have to pay more to make up for shortfalls in state funds.

While losing your money is unlikely, there's a real chance of seeing your investment stay flat or even decline in value if the state makes changes that dilute the plan.