ANNAPOLIS – Laura and Courtney Douglas, both teenagers, may not be thinking about the cost of their college educations, but their father is.
Bob Douglas, of Pasadena, has signed up for a prepaid tuition plan with the College Savings Plans of Maryland, a state program that locks in tomorrow’s tuition at today’s costs with the security of a Legislative Guarantee.
“In the end, this is the best investment for college,” Douglas said. “It’s grown faster than they’ve grown.”
The College Savings Plans of Maryland saw about a 19 percent enrollment increase for the 2003-2004 school year, due to annual and mid-semester tuition increases, officials said. The increase made the enrollment group the second highest since the program’s beginning in 1998. Enrollment for the 2004-2005 school year begins in November and ends in March.
The price of tuition is going up compared to family income, said Helen Szablya, public relations and marketing manager for College Savings.
College students are being left with 30 percent more debt compared to 10 years ago, she said.
“It’s a different time,” Szablya said. “People are becoming more aware and it’s something you have to give a lot of thought. We make sure the money is there to pay their education.”
Maryland tuition increased as much as 21 percent for this 2003-2004 school year over the previous fall’s advertised rates, after funding cuts of $120 million, according to published reports.
Mitchell Alkon, of Gaithersburg, knows all about planning. Alkon has six children, between the ages of 2 to 14, who he’s signed up for the prepaid plan.
Alkon said he already was planning for their education future when he heard about College Savings, but he like the “idea of locking in tomorrow’s cost at today’s fees.”
Alkon also said he likes the fact that if one of his children follows a different track, the money can be used by his other children.
The College Savings Plans of Maryland offers two programs: a prepaid college trust and a college investment plan managed by T. Rowe Price. The plans are not charged state or federal taxes and there is an income deduction up to $2,500 for each account annually.
A state guarantee makes sure if not enough money is available for the student; the education is paid by the state.
“We’re nowhere near that,” Szablya said. “We’re in good shape until 2018 and doing very well compared to other states.”
The money invested for the prepaid tuition plan allows for families to have the money when it’s time to pay, she said.
Officials at College Savings Plans of Maryland said they want people to be aware of the future earlier in their child’s lives.
“Anything you do early is good,” said Tim Richards, public affairs officer.
And that’s what Bob Douglas is banking on.
Douglas, one of the first to sign up in 1998, has finished paying for his plan and is now moving to the next step.
Douglas’s 17-year-old daughter, Laura, is looking at colleges to attend.
“It’s a shame more people don’t take advantage earlier,” he said. “All those people socking their money need to move it into this program.”