- The Washington Times - Monday, June 10, 2002

RICHMOND Participation in Virginia's state-run college savings programs soared this year as Wall Street struggled and public universities raised tuition for the first time in six years.
During a three-month enrollment period that ended May 1, about 10,500 Virginians joined the Virginia Prepaid Education Program a 42 percent increase over last year's registration period. The program locks in future college tuition and mandatory fees at today's prices for students in the ninth or lower grades.
This year's enrollment was the highest since about 16,000 signed up in 1996, the program's first year, said Diana F. Cantor, executive director of the Virginia College Savings Plan.
Miss Cantor attributed the increase to volatility in the stock market and the General Assembly's decision to lift a tuition freeze because of lagging state revenues.
"With the market so shaky, I don't hear anymore what I heard two years ago that you should not be in this because you can do better in the market," Miss Cantor said. "You're getting a guaranteed rate of return, no matter what happens to the market."
Also, toward the end of the enrollment period, news reports about college governing boards raising tuition motivated many Virginians to join the program, she said.
About 8,000 people signed up this year for another program, the Virginia Education Savings Trust. That is a 137 percent increase over the previous year.
In the trust program, participants' deposits are invested in the market, and federal law allows tax-free withdrawal to pay all college costs, including tuition, fees, room and board, textbooks and computers. Miss Cantor said more people are signing up for the trust program as they learn about the tax advantages.
The prepaid tuition program, which covers only tuition and mandatory fees, remains the largest with 50,000 active accounts and $448 million in assets. The education trust has 26,000 accounts and assets of $145 million.
Eugene Theroux of Fairfax County said he bought prepaid contracts this year for two of his children, a ninth-grader and a sixth-grader, after realizing he had "missed the boat" on his oldest child, a high school sophomore.
"I think what motivated me to get involved was the realization that many of my neighbors and friends had already done it," said Mr. Theroux, a lawyer. "When I looked at it, it appeared to be a very sensible way to plan and provide for my children's higher education."
The program's prices range from $1,204 for one year of community college for a newborn to $23,520 for a five-year university plan for a ninth-grader.
Those programs can be paid in monthly installments of $10 and $748, respectively.


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