ANNAPOLIS – Maryland is one step closer to joining at least ten other states that allow parents to pay tuition at a fixed rate years before a child gets to college.
A bill setting up a task force to plan for a prepaid tuition program won preliminary approval Wednesday on the Senate floor, and final approval is expected within days. Identical legislation is also making its way through the House.
The 12-member task force of politicians, education officials and members of the public would report to the governor by Dec. 1, recommending legislation for the 1997 General Assembly session. Money for the program would be provided in the fiscal 1998 budget.
Proponents of the prepaid tuition program argue that higher education costs have escalated to the point that parents cannot afford to send their children to college unless they have been conscientiously planning and saving far in advance.
“People are worried about their futures,” said Sen. Edward J. Kasemeyer, D-Howard, the bill’s sponsor. “This program would help alleviate debt accumulation at a time when we’re putting less money into higher education.”
In Florida, which has one of the oldest and most successful programs, parents may prepay tuition to state schools or community colleges from a child’s birth until age 18. The money may come in monthly payments or in a single lump-sum payment.
Each year, tuition amounts for upcoming years are projected based upon economic factors. Parents are locked in to projections made during the year they enter the program, with payments dependent upon the child’s age at entry.
Funds paid into the program are invested in a trust, which is designed to generate sufficient income to cover any difference between the prepaid amount and actual education costs at the time the child enrolls in college.
If the investments do not perform, state funds make up the difference. But this has not been necessary since the program began in 1987, Florida officials say.
If a child does not go to college, money paid into the program is completely refunded with 30 days’ notice, but no interest is paid. Students who decide not to attend a Florida public university or college may have the value of their contracts applied to the school of their choice.
The Maryland task force will decide how its program will deal with these issues, but Del. Matthew Mossburg, R-Montgomery, said the program will likely incorporate much from the Florida plan.
Mossburg is the sponsor of the prepaid tuition bill pending in the House Appropriations Committee.
Both his bill and Kasemeyer’s were amended to set up a task force instead of launching the program.
“I understand the need to proceed cautiously,” Mossburg said Wednesday. “I’m just glad the focus is on how to implement the program, not on whether or not to have it.” Gov. Parris N. Glendening supports the bills in their amended forms, said Deputy Press Secretary Ray Feldmann. -30-