In an about-face, Texas Comptroller Susan Combs said today she will ask the Texas Prepaid Higher Education Tuition Board to hold off on changes in the way people can get refunds from the Texas Tomorrow Fund.
Instead, she is recommending that the status quo be maintained until the Legislature convenes in 2011.
The fund was intended to allow people to prepay tuition for their children, locking in current rates years in advance. It ran into trouble when tuition rates skyrocketed over the past six years.
In August, Combs had notified about 108,000 people holding active contracts in the fund that, while tuition and fees at Texas schools would still be covered, the rules were changing for participants who wanted to cash out, an option intended for people whose children earn a scholarship, attend college out-of-state or die.
Under the old rules, they could cancel and receive a payout based on current tuition and fees. Under the new rules, set to go into effect Nov. 30, they would receive only the amount paid into the fund, minus administrative fees.
That could be a difference of $20,000 or so for some participants.
Combs said she will recommend that the board adopt the former rules when it meets Thursday. If the board agrees, the Nov. 30 deadline will be rescinded.
She said she will recommend that families who have already cancelled contracts be allowed to resume them if they choose to do so.
But the fund's financial problems will remain. The cost of tuition at Texas universities tripled after it was deregulated in 2003, forcing the fund into insolvency.
Enrollment in the fund was suspended in 2003, and Combs closed it in 2007.
Rep. Jim McReynolds, D-Lufkin, had asked Attorney General Greg Abbott to decide whether the board had the authority to make the changes earlier this month. Abbott hasn't yet ruled on the issue.
