ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, November 29, 1996 TAG: 9611290041
SECTION: VIRGINIA PAGE: A4 EDITION: METRO
SOURCE: WARREN FISKE STAFF WRITER
Here are some questions and answers about the Virginia prepaid tuition program:
Who is eligible for the program?
Children who are in ninth grade or younger. They must either be residents of Virginia at the time the contract is signed or children of a Virginia resident. Children of military personnel stationed in Virginia or who claim the state as their home may also enroll.
Exactly what does the program pay for?
Only tuition and enrollment fees. The plan does not cover the costs of books, room and meals at universities - which now average $4,384 a year.
Does enrollment in the program guarantee my child admission at a Virginia college or university?
No. Students must meet the admission requirements of the university or college they wish to attend. Every student with a Virginia high school diploma or equivalency is allowed to enroll in a community college, to which the savings plan also may be applied.
Can I cancel the contract and at any time and get my money back?
Yes, but you would receive only the payments you made into the program and no interest. If your child died before college or received a full scholarship, you would be refunded your principal plus 8 percent interest.
What options are available under the program?
Many. You can pay for everything from one-year at a community college to four years at a state university. You can also pay for a combination - for example two years at community college and two years at a university.
There are three payment options: a lump sum; a five-year payout or a monthly schedule that can stretch until the child enters college. The longer the payment period, the more the total cost.
What if my child doesn't go to college?
You would be refunded your total payments without interest.
What if my child attends an out-of-state college?
Your payments still could be applied to tuitions. The annual payment, however, would be capped at the average cost of in-state tuition at Virginia colleges and universities. In other words, there is no guarantee the plan would pay full out-of-state tuition costs.
What if we move to another state?
You could remain in the program and apply your investment to whatever university your child attends. However, your enrollment in the program does not confer state residency on your child should he or she live outside of Virginia.
What if my child attends a private college in Virginia?
Your payments would be applied to tuition, capped at cost of the highest tuition at a Virginia public university.
Could my child delay college and retain his benefits?
Yes. The payments will be accepted up to 10 years after high school graduation. Military service time does not count toward the 10 years.
Can grandparents pay for the program?
Yes. Anyone can buy a tuition plan for a child, including employers.
Can I transfer benefits from one child to another?
Yes, but you may only transfer it from an older child to a younger one.
Who manages the money I pay into the program?
The money is managed by an eight-member trust fund board and staff. The board consists of the state comptroller, state treasurer, director of the State Council on Higher Education, the chancellor of community colleges and four citizens appointed by the governor.
The board may invest in both stocks and bonds. "It won't be a glossy portfolio we're trying to achieve," said Diana Cantor, the executive director of the program. "What we're trying to do is follow an actuarial table that estimates what tuitions will cost."
How will the tuition payments be made to colleges?
Colleges would directly bill the Virginia Prepaid Education Program for your child's tuition and the agency will make direct disbursements.
Will there be future chances to join the program?
Yes. The program is scheduled to be opened for a few months every year. However, the cost of locking in a tuition rate will increase for new subscribers each year as the cost of attending colleges goes up.
What other resources are available for learning about how to save for college?
There are almost limitless possibilities. Experts say a good place to start, if you have access to a computer, is the home page offered by the National Association of Student Financial Aid Administrators. The web site is http://www.finaid.org/
Experts also recommend contacting school counselors, the financial aid office at local colleges or a financial consultant who is well recommended to you.
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