PHOENIX - A bill that would enable parents to begin saving for their children's college education at birth is scheduled to be heard this morning in the House Committee on Education.

House Bill 2270 would establish a tuition prepayment fund in the state treasurer's office. Parents, grandparents or other relatives could begin a tax-free savings account that would cover college tuition and tuition inflation. If the account is started at the child's birth and payments of the contracted amount are made regularly, when the child reaches age 18, the account would cover the cost of sending him to an Arizona university for four years.

Many families make too much money to qualify for federal grants, yet they can not afford to write a check for a $1,000 every semester, said Paul Allvin, executive director of Arizona Students' Association, the organization that has led the lobbying on the bill.

This program is designed for people in the middle class who fall through the cracks, Allvin said.

With a tuition prepayment program, parents would sign a contract for anywhere from 5 to 18 years. Parents could invest in a two-year community college, a four-year university package, or a combination of the two, Allvin said.

The state would contract with an investment company, which would work to ensure that the fund's rate of return exceed tuition inflation. A bank would be chosen to administer the tuition contracts and accept payments on behalf of the state.

If a child decides not to attend college or to attend a university outside of Arizona, the money would be 100 percent refundable with "no questions asked," he said.

Allvin said many states have a "hardship clause" built into the plan that allows families to either skip payments or quit the program. He said this is not in the present bill, but it would more than likely be a part of the final program.

Seventeen states already have a tuition payment plan, Allvin said.

In Florida, which has comparable tuition to Arizona, parents would pay $47 a month for 18 years for a child born in 1995. In order to eventually send an eighth-grader to college, parents would need to invest $125 a month beginning in 1995 to cover four years of tuition at a Florida institution.

Allvin said the program would cost $250,000 to $500,000 to start up. He also said he hopes the bank chosen for the program will provide some of the start-up money.

Allvin said parent and alumni associations love the tuition prepayment plan because it fosters university loyalty at a young age for both parents and children.

This is the second time the bill has been introduced. Last year it passed the education committee, but failed in appropriations.

The current bill passed the Committee on Public Institutions and Universities last week 9-0.