- The Washington Times - Saturday, June 21, 2003

RICHMOND — Fewer parents signed up this year for the state program that locks in today’s tuition rates for their children’s later attendance at Virginia colleges and universities.

Diana Cantor, executive director of the Virginia College Savings Plan, said Wednesday that 10,305 persons have signed up since Feb. 1, a figure that fell short of last year’s roughly 10,500, but exceeded the group’s hopes for about 7,500 participants.

The parents who signed up during the Feb. 1-May 1 enrollment period will be paying 25 percent more than those who signed up last year, an increase the organization implemented in November in response to spikes in tuition and fees at colleges and universities around Virginia.

Nationwide, tuition during the 2002-2003 academic year at public four-year universities rose about 9.6 percent, the College Board said, more than the prepaid programs anticipated when they initially set their rates.

Miss Cantor said parents recognize that the cost of a college education is increasing at every level and that locking in even the increased 2003 rate is likely to be a better deal than prices down the road. The recent increase in the prepaid tuition rate means the family of a kindergartner who would enter a four-year university in 2015 would pay $21,636.

But the economy remains tough. Chris Hunter with the College Savings Plan Network in Lexington, Ky., said tight state budgets and the slow economy have influenced prepaid tuition programs across the country from last year, when many were expecting enrollment rates to continue to increase.

Still, he said, “In some cases, the rising tuition rates at schools have been an advantage to the prepaid programs, because it lets people know what the future’s going to look like.”

Virginia is one of 20 states with prepaid programs, which allow parents to lock in current rates by making monthly payments on contracts with states or “units” of tuition at four-year or community colleges. In Virginia, parents may sign up newborns year-round but older children during only the three-month period from February to May.

In addition, all states except Washington offer college savings plans, with investment accounts that have tax-free withdrawals for all college costs, including tuition, fees, room and board.

Nationwide, parents have invested roughly $26 billion in the prepaid plans and savings programs, Mr. Hunter said. In Virginia, more than 67,000 parents have signed up for the prepaid plan since 1996, investing about $1 billion.

But programs in several states are worrying about long-term solvency in the face of poor investment returns and rising tuition costs at schools. Some have suspended enrollment because of financial uncertainty.

Miss Cantor stressed the long-term nature of the prepaid investments and said the returns of the Virginia program will be evaluated later in the summer in preparation for determining next year’s rates.

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