States are considering major changes in prepaid college tuition programs——raising prices, restricting participation or canceling them——as they grapple with financial woes. Nationwide, families will likely have to pay more to participate, or accept that they might not cover tuition when children go to college.
Colorado has closed its prepaid plan to new investors and told existing ones that it may not cover future tuition increases. Wisconsin stopped selling its plan Dec. 20. Maryland and Illinois are among states hiking prices by 20% or more.
Prepaid plans let parents lock in tuition by paying for it now, protecting them against rising costs. But the bear market has hurt investment returns, leaving the plans unable to keep up with big increases in tuition. So far, Colorado is the only state that has told participants their investments may not cover tuition, and no plan has missed a payment.
Other states have said they will fulfill o
A. they would not have to make any other payment later
B. they would not be guaranteed against further payment
C. the plan would cover further tuition increases
D. the plan would be replaced by a guaranteed investment contract
States are considering major changes in prepaid college tuition programs——raising prices, restricting participation or canceling them——as they grapple with financial woes. Nationwide, families will likely have to pay more to participate, or accept that they might not cover tuition when children go to college.
Colorado has closed its prepaid plan to new investors and told existing ones that it may not cover future tuition increases. Wisconsin stopped selling its plan Dec. 20. Maryland and Illinois are among states hiking prices by 20% or more.
Prepaid plans let parents lock in tuition by paying for it now, protecting them against rising costs. But the bear market has hurt investment returns, leaving the plans unable to keep up with big increases in tuition. So far, Colorado is the only state that has told participants their investments may not cover tuition, and no plan has missed a payment.
Other states have said they will fulfill o
A. they would not have to make any other payment later
B. they would not be guaranteed against further payment
C. the plan would cover further tuition increases
D. the plan would be replaced by a guaranteed investment contract
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