Prepaid Tuition Plans Take A Hit

[RamboLiberal]

http://www.cbsnews.com/stories/2003/10/17/national/main578587.shtml

A combination of rising costs and plummeting investments has forced several states to suspend enrollment in prepaid tuition plans designed to protect families against spiraling expenses at public colleges.

Ohio announced last week it was suspending its program for a year because the state was losing money. West Virginia, Kentucky and Texas also have temporarily cut off new enrollment, and earlier this year Colorado halted enrollments in its plan completely.

Prepaid tuition plans allow families to purchase tuition credits based on the current rates — in lump sums or monthly payments. A state then pools the money in long-term investments, hoping that earnings will match or exceed the cost of tuition years later when a child is ready to attend college.

Now, the problem is tuition is rising faster than investment earnings.

[LizW]

1. Got a notice last year saying the fund I paid into

in now only 90% funded. I wonder now bad the news will be this year.

:grr: