Paying Child’s Future Tuition at Today’s Cost OKd by Panel

Legislation that would allow parents to pay for their child’s tuition at a California public university years in advance at today’s prices was approved Wednesday by a Senate committee.

An 8-1 vote sent the measure by Assemblyman Tom Hayden (D-Santa Monica) from the Senate Education Committee to the Appropriations Committee for more screening. It previously passed the Assembly by a 42-27 vote.

The legislation is designed to ease parental fears about being able to afford to send their child to the University of California or a California State University campus because of ever-increasing tuition costs.

It would permit parents to prepay the tuition at today’s prices by installments.

When the child graduated from high school, he or she would be guaranteed a four-year college education, regardless of what the tuition rate was at that time, provided that all entrance requirements were met.

The state could afford to do this because the prepayment money would be invested in stocks and bonds and other financial securities. That income would be kept by the state if the child did attend a public university in California.

Hayden’s Response

If the child decided not to go to college, chose to go to a private school or an out-of-state institution instead, or did not meet UC or Cal State entrance requirements, the money would be refunded with interest.

Five Democrats and three Republicans voted for the bill. Sen. Becky Morgan (R-Los Altos Hills), the lone no vote, said she did not feel the state should act as a banker for parents of a prospective college student when there are numerous private sector investment plans already available.

Hayden replied that the state already acts as a banker for many public employees by investing their money for retirement pension fund purposes.

There was no opposition testimony at the committee hearing.

Later, Jonathan A. Brown, a lobbyist for the Assn. of Independent California Colleges and Universities, said his group is neutral on the Hayden bill. Brown said the association will seek an amendment to provide a straight savings option for parents who want their child to go to a private school. Hayden said he is willing to discuss the idea.

The prepaid college tuition idea originated with Democratic Gov. James Blanchard of Michigan, who proposed it in his 1986 state-of-the-state message. A bill to implement that proposal subsequently was passed by the Michigan Legislature.