Texas offers new pre-paid tuition plan

Families across the Rio Grande Valley, as well as the state, can start paying for their children's college years well before they ever set foot on campus.

On Wednesday, Texas Comptroller Susan Combs unveiled the state's new prepaid college tuition plan, the Texas Tuition Promise Fund, which allows families to lock in current tuition costs and fees at public universities.

This is the second prepaid tuition program the state established. From 1995 to 2003 it ran the Texas Tomorrow Fund, which used projected fees to determine how much it charged families. That program ended after the state approved deregulating college tuition.

Officials from the Valley's higher learning institutions said they were pleased the state is offering the new fund because it will allow more students to go to college.

"We believe it's a great idea and I expect many families will take advantage of this opportunity," said Shirley Reed, the president of South Texas College.

But she said she's concerned the fund attracts more middle-class families than lower-income families and that little is being done to educate lower-income families, who comprise the majority in the Valley, about the program's benefits.

Prepaid tuition plans clearly help the University of Texas-Brownsville/Texas Southmost College, said Mari Chapa, the university's financial aid director.

The university has received about $100,000 a year for the past four or five years from the 40 to 45 students who took advantage of the Texas Tomorrow Fund program, Chapa said.

Though the program stopped enrolling new participants in 2003, those who had already enrolled continued to pay into the plan.

"The more students use (these types of) program, the easier it is to get a college education. (The prepaid plan) is an incentive all the way around," she said. "For our population here it certainly is a good venture."

Like Reed, Chapa said she's not sure if low-income families can afford to take advantage of the fund. That's why she encourages students to apply for scholarships and other financial aid. About 80 percent of the university's student population qualifies for financial aid, she said.

These programs really benefit middle-income families that don't qualify for federal grants but can't afford to pay for college alone, said John Edwards, vice president for enrollment and student services for the University of Texas-Pan American.

"We are delighted the state of Texas brought this back," Edwards said. Only 139 out of more than 17,000 UTPA students are taking advantage of prepaid plans, which is simply not enough students.

"It's a drop in the bucket," Edwards said.

The Promise Fund offers three payment plans from which parents can choose, according to the comptroller's office.

The first plan allows parents to put money toward paying for what would be the most expensive public school in the state. The second has parents pay an average cost of tuition and fees for all public four-year schools. And the third allows parents to pay an average cost of tuition and fees for all two-year community colleges

Families also have the option to pay one lump sum or to pay installments with annual interest, according to the comptroller's office.

The money can be used at private and out-of-state institutions. Prices are expected to change as colleges and universities adjust their tuition rates, according to the comptroller's office.

The fund covers only undergraduate tuition and required fees. It does not cover room and board, books or other expenses.

Texas also offers the Texas College Savings Plan and the LoneStar 529 Plan to help families cover costs not covered by the Promise Fund.

The comptroller's office launched Web sites where parents can read more about the new prepaid tuition plan and other college savings plans: www.EveryChanceEveryTexan.org and www.TexasTuitionPromiseFund.com.

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Jennifer L. Berghom covers education and general assignments for The Monitor. She can be reached at (956) 683-4462.