Make us your home page
Instagram

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

Senate plan would suspend Florida Prepaid College program

TALLAHASSEE — End the Florida Prepaid College program

That's the proposal released Thursday by the Senate higher education budget committee.

The popular program is the nation's largest and has sold more than 1.4 million plans since 1988, letting parents lock in present-day tuition and fees for their future students. Nearly 20 percent of undergraduate students at Florida universities have a prepaid college plan.

But Sen. Evelyn Lynn, R-Ormond Beach, the committee chairwoman, questions its long-term viability and wants to suspend enrollment. No current participants would be affected.

"The stock market, as you know, the last few days has been dropping," she said in pitching the idea. "Should the investments prove not able to take care of the promised contracts, the state of Florida is totally responsible, and that means for everything that is sold, as of this moment, we are totally responsible. And that's a huge liability — far larger than pension, far larger than most anything we have."

David Bishop, a spokesman for Senate President Mike Haridopolos, said Lynn "misspoke" and the program's liabilities are nowhere near the state's pension obligations, which are close to $140 billion.

Florida Prepaid is about $500 million in the black, with $10 billion in assets covering its $9.5 billion in liabilities. Indeed, just two years ago Lynn and other senators talked about borrowing from the fund to address budget shortfalls.

Stanley Tate, the Miami businessman who is the founder and namesake of the program, said news of the proposal "was a shock of shocks."

He said nearly all of the program's investment portfolio are in government securities. "We don't have stocks!" he said.

Families pay the tuition, dorm costs or university fees all at once or in installments, locking in current rates. They can buy the plans from the time a child is a baby, all the way up through high school, potentially saving thousands in college costs.

The program was built on the assumption of tuition increases no greater than 7 or 8 percent annually. But tuition went up 15 percent last year and could go up another 15 percent this year.

Naturally, those contracts have gone up with tuition. Now, it's roughly $46,000 that can be financed over 18 years, said Tate.

That tuition cost is the problem, said Sen. Stephen Wise, R-Jacksonville, a member of Lynn's committee.

Wise said that just 14 years ago he paid $11,000 for each of his two grandchildren. He has another grandchild born in May but said he can't afford to buy into the program for her.

Though he acknowledged the current financial health of the program, he said that he expects fewer families to buy in as the costs increase.

"Guess who's going to be left holding the bag?" he said.

Tate, too, has warned that tuition increases threaten the program's viability. But he said that three years ago, the program built in assumptions of 15 percent increases.

Lynn's counterpart in the House, Rep. Marlene O'Toole, R-Lady Lake, said she has not read Lynn's proposal and could not comment on it.

The Florida Prepaid College Plan started in 1988 with a promise aimed at the state's middle-class families. Then-Gov. Bob Martinez kicked off the first enrollment period by buying contracts for his twin granddaughters. The program sold 58,651 tuition and housing contracts in that first year.

Lynn's plan would leave in place new enrollment for the so-called STARS program, which provides a matching scholarship for at-risk kids to attend college.

Tabi Deneweth of Brandon said she had already signed up her 5-year-old daughter, and was planning to enroll her two younger children. "That would be a shame if they ended it," she said. "I personally have a lot of student loans, and I wouldn't want my kids to have that burden."

Niel Eyde, 42, of Gulfport has a prepaid plan for his 2-year-old son and had hoped to buy one when his second child, a girl, is born in three months.

He understood that he might have to pay a cost differential under the new rules. "But I still saw this as the right thing to do," Eyde said. "I want to be a responsible parent."

He thinks the idea would be shortsighted for the state.

"The reality of it is that the Florida prepaid program was getting you to commit to a Florida school from day zero," he said. "Now, all of a sudden, parents will not be looking at a Florida school. It surprises me. … Adjust the program. Don't get rid of it altogether."

Times/Herald staff writers Mary Ellen Klas, Marlene Sokol and Tom Marshall contributed to this report. Jodie Tillman can be reached at [email protected] or (850) 933-1321.

Senate plan would suspend Florida Prepaid College program 03/17/11 [Last modified: Friday, March 18, 2011 3:41pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Suspect in Maryland office park shooting is apprehended

    Nation

    EDGEWOOD, Md. — A man with a lengthy criminal past who was fired from a job earlier this year for punching a colleague showed up for work at a countertop company on Wednesday and shot five of his co-workers has been arrested, authorities said. Three of them were killed and two critically wounded.

    Workers from the Advanced Granite Solutions in Maryland console each other Wednesday after a shooting there killed three people. Officers said the attacker fled and also shot a man in Delaware.    as police and Emergency Medical Services respond to a shooting at a business park in the Edgewood area of Harford County, Md., Wednesday, Oct. 18, 2017.  A gunman opened fire at the office park killing several co-workers and wounded others, authorities said.  (Matt Button/The Baltimore Sun via AP) MDBAE105
  2. Lightning's J.T. Brown to stop anthem protest, focus on community involvement

    Lightning Strikes

    COLUMBUS, Ohio — Lightning wing J.T. Brown will no longer raise his first as a protest during the national anthem before games.

    J.T. Brown says he will work more with the Tampa police and groups that serve at-risk young people.
  3. The two Ricks tangle at what may be final debate

    Elections

    ST. PETERSBURG — In what was likely the last mayoral forum before the Nov. 7 election, Mayor Rick Kriseman and former Mayor Rick Baker started out small, discussing neighborhood issues like recycling and neighborhood funding. They ended tangling over familiar subjects: the future of the Tampa Bay Rays, sewage …

    Ex-Mayor Rick Baker, left, and Mayor Rick Kriseman, right, debated familiar topics. The Times’ Adam Smith moderated.
  4. Tampa Chamber of Commerce announces small business winners

    Business

    TAMPA — The Greater Tampa Chamber of Commerce selected the winners of the 2017 Small Business of the Year Awards at a ceremony Wednesday night at the David A. Straz, Jr. Center for the Performing Arts. More than 600 attendees celebrated the accomplishments of Tampa Bay's small business community.

    Vincent Cassidy, president and CEO of Majesty Title Services, was named Outstanding Small Business Leader of the Year by the Greater Tampa Chamber of Commerce.

  5. UF president Kent Fuchs: 'Charlottesville changed everything' (w/video)

    K12

    GAINESVILLE — Wednesday evening, hazy rumors of an impending Neo-Nazi march reached some wary protesters. A few quickly rallied to denounce the marchers in downtown Gainesville, only to find plazas empty but for police.

    University of Florida President W. Kent Fuchs talks with reporters Wednesday about white nationalist Richard Spencer's planned speech on Thursday. He said of Spencer: "In a small way, he is causing us to redouble our focus on supporting actions that are the opposite of what he wants." [WILL VRAGOVIC   |   Times]