ASA proposal to aid middle class with tuition fund

By Zach Thomas
Arizona Daily Wildcat
January 16, 1996

For many, attending college is just a dream. They make too much to qualify for financial aid, yet too little to cover the costs of a college education.

A proposal in the Arizona House of Representatives will address this problem by creating a prepaid tuition fund in the state treasurer's office.

Parents who might normally be unable to pay up-front for a college education could make small, monthly payments throughout the child's life.

"This is the first bit of at-risk relief for middle-income families in Arizona," said Paul Allvin, executive director of the Arizona Students Association and UA graduate.

According to the bill, introduced Jan. 8 by house Republican Bill McKibbons, participants would sign an advanced payment contract pledging to maintain monthly, fixed-rate payments until their children reach college age.

"This is designed to help middle-income families get their kids to college," said Christine Thompson, an ASA director and political science senior. "It will encourage savings, something that is not going on now."

The bill states that money in the fund will be invested by a private firm to counteract tuition increases and inflation rates.

With such a large amount of money, the investment firm will be able to diversify investments for security and stability, Allvin said.

If investment returns do not cover tuition increases for a given year, prices for new contracts can be adjusted to cover the extra costs.

A nearly identical democratic bill is also on the house agenda. It calls for the creation of an Arizona tuition prepayment board to oversee the fund, Thompson said. However, it has no sponsors from the Republican majority.

Although designed for use within Arizona, there is no guarantee that participating students will be accepted into Arizona universities or community colleges. Should a student elect an out-of-state education or no education beyond high school, any deposite d money will be returned to the family.

A similar proposal was tabled last year after lawmakers decided to study the idea before taking action.

Other programs in Florida, Ohio and Texas have proven surprisingly successful. Florida now boasts a fund of $1.79 billion, with a surplus of $150 million. In Florida, 12 percent of youngsters now have tuition-payment contracts.

Unlike Florida's program, Arizona's prepaid tuition proposal will not be insured by the legislature against fraud and misuse of fund monies. The treasurer's office is responsible for annually screening investment firms.

Every year, the state auditor general will also audit the program to determine current and future feasibility, Thompson said.

The prepaid tuition proposal is one of three parts of ASA's agenda to make higher education more accessible to Arizonans. Among the other programs are the now-delayed project ASPIRE, a program designed to help the at-risk poor, and a work-study proposal t hat is also on the legislative agenda.

More information on the prepaid tuition bills and other items on the legislative agenda is available on the World Wide Web at