The South Carolina Tuition Prepayment Program is the latest victim of the nation’s struggling economy.
State officials say the program, which allows parents to pay future college tuition using today’s rates, is anywhere from $30 million to $60 million in debt.
Ideally, the state invests the money parents pay into the program and, when the student is ready to attend college, there would be enough to pay for tuition.
“Tuition started skyrocketing, rising faster than the returns on the investments,” S.C. Treasurer Converse Chellis said.
Chellis said the program has been closed to new enrollees and there are three options for moving forward.
The first is to continue paying tuition for the program’s 6,200 members until the money is gone, which could take between 10 and 15 years.
The state, however, would still be responsible for the shortfall in its entirety, once the program’s funds are gone.
A second option would use taxpayer dollars from the state’s general fund in smaller increments over time to close the gap.
Chellis said using taxpayer money would go against the original purpose of the program, but that it might be necessary.
“It was a program that was set up not to have any cost to the taxpayers. And now it looks like because there’s a moral obligation, maybe, to continue it, or to pay back what they’ve paid in, we’re still on the hook for it,” Chellis said.
“It’s not fair to taxpayers, but it’s certainly not fair to the families that are already invested in this,” Jackie Rogers of Irmo said.
A third option would close the program and pay back participating families with 4 percent interest.
Don Weaver with the state Association of Taxpayers said that’s a bad idea.
“I think it sets a bad precedent for the state to say, ‘We made this promise. We didn’t get the returns on our investments. We’re pulling the rug out from under you.’ Some of these kids could be close to graduation,” Weaver said.
Columbia resident Dickson Monk agreed.
“It sounds like the state should follow through on its promises,” Monk said. “A kid shouldn’t be denied the ability to go to school that they were promised in the beginning.”
The decision of which option to choose will be made by lawmakers, but there is no timetable for when they might address the issue.
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