THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Friday, October 25, 1996 TAG: 9610250825
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY PHILIP WALZER, STAFF WRITER
LENGTH: 152 lines
Parents of Virginia children can lock in four years of a college education at a state school for less than $17,000 - even if their children won't be freshmen until the year 2014.
The prices for the first sign-up period in the state's new pre-paid tuition plan were set Thursday in Richmond by the board of the Virginia Higher Education Tuition Trust Fund. Parents may sign up from Dec. 2 to Feb. 28.
The program offers a variety of payment plans to cover everything from five years at a four-year state-supported college to one year at a community college. The prices cover tuition and fees, but not room and board. Parents can pay a lump sum or can make monthly payments that might stretch out more than 17 years.
The program was approved in 1994 by Gov. George F. Allen and the General Assembly to offer parents a way to avoid skyrocketing tuition.
A lump-sum payment for a four-year education will run from $14,660 for children less than 1 year old to $16,699 for ninth-graders. Students who have already completed ninth grade are not eligible.
One year at a four-year school will cost from $3,716 for an infant to $4,233 for a ninth-grader. The range for one year at a community college will go from $1,283 to $1,462.
The monthly plans are as low as $12 a month for one year of community college for an infant and $33 a month for one year at a four-year college.
The payments for four-year schools would apply at any state-supported four-year school in Virginia - as long as the student gets admitted into the school.
Even at the highest ends of the ranges, parents would not be paying much more than they would if their children were now in college. The annual tuition-and-fee average at Virginia's four-year state-supported colleges is $4,000. Room and board averages an additional $4,384.
``You are locking in tomorrow's tuition at today's prices,'' Diana F. Cantor, executive director of the program, said Thursday. ``You're replacing uncertainty with certainty.''
In the early '90s, colleges approved double-digit annual increases in charges to offset state budget cuts. Earlier this year, Allen and the legislators enacted a two-year tuition freeze for in-state undergraduates. But Virginia still remains among the 10 states with the most expensive college charges.
In the program, the state will invest the payments and guarantee that they will cover the students' tuition and fees at the time of enrollment - no matter how much or little the state makes on the money or how high tuition rises in the interim.
The prices in the pre-paid tuition program will change annually, reflecting fluctuations in tuition rates and the economy. The second sign-up period is scheduled to be next fall, Cantor said.
Rodney Jordan, a Norfolk father of a 16-month-old girl, Paige, said: ``Conceptually, it sounds good. If it encourages young parents like myself to plan for a child's future education, that would be a good thing.
``My concern would be, how is the state going to manage the fund? . . . And can I not have my own self-discipline to invest in a mutual fund or some other type of savings plan and manage it myself?''
Cantor said the program offers security. ``You've locked it in; you don't have to worry about it,'' she said, referring to tuition and fees. Cantor also said parents can use other investments to pay for the remaining portions of a college education, such as room and board and books.
Cantor - who is married to state Del. Eric Cantor (R-Henrico) - plans to be one of the investors. She has three children - Evan, 5; Jenna, 3; and Michael, 2. But she's not sure which payment plan she'll use.
``We haven't gotten that far yet,'' she said, ``but I'm certainly going to look at whatever I can.'' MEMO: Those interested in the pre-paid tuition plan can call
1-888-567-0540. Leave your name and number, and you will be sent
information and a contract sometime next month. The sign-up period is
from Dec. 2 to Feb. 28. ILLUSTRATION: Graphics
THE PRICE SCHEDULE
Virginia's pre-paid tuition program offers a variety of payment
options that have sliding scales depending on the age of the child
at the time of payment.
Here are some examples:
A lump-sum payment covering four years at a state-supported
university: From $14,660 for children less than 1 year old to
$16,699 for ninth-graders.
A lump-sum payment covering two years at a community college:
From $2,555 for infants to $2,910 for ninth-graders.
A lump-sum payment covering one year at a university: From $3,716
to $4,233.
A monthly payment, over five years, covering one year at a
university: From $74 to $83.
Source: Virginia Higher Education Tuition Trust Fund
THE FINER POINTS OF PREPAID TUITION
When will the first sign-up period be?
From Dec. 2 to Feb. 28.A future sign-up will be next fall.
Who's eligible?
Parents of children from newborns to those who haven't finished
ninth grade. The child must be a Virginia resident or have a parent
who is a Virginia resident.
Will there be different prices for different four-year schools in
Virginia?
No. The four-year price will cover any four-year, state-supported
school in Virginia.
How much tuition can you pay for?
Parents can pay for everything from one year of education at a
community college or four-year school, to five years at a four-year
university. They can also pay for a combination - say, two years of
community college and two years at a four-year school.
What payment plans are available?
Parents will have three options: a lump sum, a five-year payment
plan period or a monthly schedule that can stretch until the summer
a child enters college. The longer the payment period, the more the
total cost.
Could the plan be transferred to a student's brother or sister?
Yes, if the sibling is younger. The sibling must not have
completed the ninth grade at the time of the transfer.
Can parents get refunds if they change their minds?
Yes, but only of the money they put in, not any earnings from the
plan. If the student dies or becomes disabled - or earns a
scholarship - the state will pay back the principal and interest.
``You never want to provide any disincentive for a child to receive
a scholarship,'' said Diana F. Cantor, executive director of the
program.
What happens if a child decides to go to a private college in
Virginia or an out-of-state school?
If the student went to the University of Richmond, for example -
a private Virginia school - the state would give the university the
tuition payments and interest income, minus administrative fees. But
the state would never pay more than the tuition-and-fee total
charged by the most expensive four-year public university in
Virginia at the time of enrollment. Parents would then have to make
up the difference.
If the student went to, say, the University of North Carolina at
Chapel Hill, the state would give the university the tuition
payments and a ``reasonable return'' (as yet undefined), minus
administrative fees. The state would never pay more than the average
tuition and fees at Virginia four-year schools at the time of
enrollment.
The reason for the difference? ``There's a built-in incentive for
our kids to stay in Virginia,'' Cantor said. ``We want them to stay
productive citizens of the commonwealth.''
What happens if the family moves out of Virginia after the
payment?
The payment would still cover the equivalent of the cost for an
in-state student, but the college could end up charging the student
the higher out-of-state rate. That, Cantor said, would be up to the
individual school.
Could the child delay going to college?
The payments will be accepted for up to 10 years after the
child's projected enrollment in college. Time in the military will
not count toward the 10 years.
- Philip Walzer
KEYWORDS: COLLEGE TUITION by CNB