Prometheus 6   

Hey, you didn't need that education anyway, right?

States trim prepaid tuition plans
Soaring costs give parents a harsh lesson in economics
By V. Dion Haynes
Tribune national correspondent

October 13, 2003

LOS ANGELES -- Last week, higher education officials in Ohio took drastic steps to grapple with severe budget cuts, soaring tuition and poor investment returns: They decided to halt new enrollment in the state's highly popular prepaid tuition program and prohibit current participants from making contributions in 2004.

In so doing, Ohio joined a growing list of states forced to scale back their prepaid tuition programs or hike fees to avoid running out of cash.

Introduced in Florida, Michigan and Ohio in the late 1980s, the prepaid tuition programs spread to 20 states over the next decade to help lower- and middle-income parents save thousands of dollars in inflation by paying the future cost of their children's college education at current prices.

But in recent months, officials in Ohio, Texas, Colorado, Kentucky and West Virginia have closed enrollment. At the same time, parents in Illinois, Michigan and several other states have faced contribution hikes surpassing the rate of tuition increases.

"If our projections for next year are accurate, tuition will have gone up over 50 percent in four years," said Jacqueline Williams, executive director of the Ohio Tuition Trust Authority, which administers the prepaid tuition program. "Over the last two years, we've had to raise our tuition units nine times."