Assemblyman Tom Hayden (D-Santa Monica) wants to borrow an idea from Michigan that might help families stop worrying about where the money will come from when their children are ready for college.
The idea comes from Gov. James J. Blanchard of Michigan, where about $3,000 paid into a state trust fund will cover tuition at the University of Michigan or any other public college 18 years from now--when tuition is expected to cost more than $20,000 for four years. The state, which would invest the money, promises to pay no matter how much college costs when the due date arrives.
Michigan believes that its program will make college more accessible, and that it sends a positive message to youngsters: Stick with the books because you are going to college, come what may.
Parents, grandparents or friends can make the down payment on a youngster's future. Families that don't have the cash on hand can borrow and repay the loan over time. Community groups, churches, schools, alumni or any other organization can buy into the plan and assign the money to a lucky student years later.
Michigan's state education trust fund will be managed like a pension fund. The state's $14-billion pension fund, heavily invested in stocks, earned a 23% return on investment last year--no surprise, considering the market; it has averaged 10% annually over 10 years.
If college costs continue to escalate, the average child born today may well have a smaller chance of getting a college education than his parents did 25 years ago.
A prepaid tuition plan that would, at a minimum, guarantee California youngsters an education at one of the state's fine public universities deserves a hard look by the Legislature.