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A way to plan for college

Most parents want their children to go to college, and they realize that spiraling costs pose a major threat to that goal. Meanwhile, aid such as guaranteed student loans is getting harder to come by. Some parents are diligent enough to start putting aside college money early, but most never get around to it. The procrastinators might find the Florida prepaid college program gives them just the incentive they need to start planning for their children's college needs. Essentially, the plan offers a chance to pay today's prices for future tuition and optional dormitory space (currently, four years of both will cost you about $10,000) at a state university or community college, for any Florida child under 12th

grade. It also can be used at a private college in Florida, but the state will only pay an amount equal to costs at a public institution.

Florida's plan, the largest in the country, looks like a pretty good deal _ for those who can afford it. It erases some of the guesswork about how much to save for college, and can really save parents a lot of money if costs continue to soar. A University of Florida freshman this year, for example, will pay 80 percent more in tuition than one entering in 1981. The plan is also a way to discourage a "brain drain" of bright students away from the state.

It's hardly perfect, though. For one thing, if a student doesn't use the plan, only the principal, not interest, is refunded; the plan locks students intoFlorida schools long before their talents are revealed; it's limited to tuition and dorm costs, which only account for 39 percent of total college expenses; students must pay taxes on the plan's earnings; and if college costs do outstrip earnings of the plan, the state's taxpayers will make up the difference.

The plan has been pronounced actuarially sound, and administrators are working to add flexibility by arranging payroll deduction plans and exchange programs that will allow enrollees to attend schools in other states with similar plans.

They do acknowledge that their biggest failing so far has been in attracting minority and low-income families, especially since the plan is also touted as a way to encourage high-risk students to stay in school. Nearly all of the 105,000 sales so far have been to middle and upper-income purchasers, but the foundation hopes to change that with aggressive marketing and a new program that will award 670 tuition scholarships to deserving low-income students. But those scholarships would be far more encouraging if they also covered dormitory costs; university presidents already complain about the plan reserving up to 50 percent of scarce dormitory space, since that allows the well-to-do to squeeze out low-income students who need the cheap campus housing.

Sign-up for this year's plan continues through Jan. 11. Options are provided for virtually any contingency, including the right to transfer the plan to siblings. For detailed information, call 1-880-552-GRAD, or write the Florida Prepaid College Program, P.O. Box 4400, Jacksonville, Fla. 32201-4400.