The Better Business Bureau has a saying: If it sounds too good to be true, it probably is. The phrase is directed at con artists intent on ripping off consumers, but it unfortunately also applies to a noble but ill fated cause the government of Texas became involved in.
That’s the effort to let parents lock- in colleges costs and pay them as their kids grow, rather than facing a big hickey when little Johnnie and Suzy are ready for the campus.
The first incarnation of the plan was called Texas Tomorrow, later renamed the Texas Guar anteed Tuition Plan. It started in 1996 and was backed by “ the full faith and credit of the State of Texas.”
Tens of thousands of Texas families took ad vantage of it. Who can blame them? It was a good deal — for them.
The idea was to take the money parents paid in and invest it so the return on investment would cover the inf la tion that would inevita bly make colleges costs higher when the kids were ready to go.
Nice plan on paper, but it just didn’t work.
Just seven years into the plan, the Texas comp troller realized colleges costs were rising far above what the Texas To morrow fund could cover through returns on its investments. She halted any further enrollments. That was the same year the state Legislature de regulated tuition, allow ing individual campuses to set their rates rather than adhering to a price set by the state. Tuition, which had been rising, took off like a ballistic missile, more than dou bling in just of couple of years. That means the state had to pay out a whole lot more than it anticipated to educate the children of Texas To morrow enrollees — it had, after all, obligated itself with “ full faith and credit.”
It should be no sur prise then that the cur rent comptroller, Susan Combs, admitted this summer the fund was going broke. When the money runs completely out in the next eight years, the state will still owe about $ 2 billion.
It’ll pay that with tax payer dollars. That means you and I will wind up paying for little Johnnie and Suzy’s value- priced education. I think the acceptable term for that nowadays is “ taxpayer bailout.”
Not yet ready to give up on a bad idea, Combs has reworked the concept into an incarnation now called the Texas Tuition Promise Fund. It allows parents to pre- purchase tuition in “ units.” The good news is it does pro vide for upping the prices as tuition costs increase, and it takes the state off the hook for shortfalls. The bad news is it puts individual colleges and universities on the hook for making up shortfalls, and they’ll have to do that by raising tuition. So, if I send a kid to college without using the Texas Tuition Promise Fund, I’ll likely have to pay a higher cost to cover the tuition of kids who did enroll in the program.
Prepaid education is a wonderful idea that might produce marvelous re sults, if we lived in a per fect world. But we don’t, and it doesn’t. And think ing that any program con cocted by a government is going to work like it’s supposed to — well, that sounds too good to be true.
