Guest Opinion: Nevada families investing in prepaid tuition program

The Nevada Prepaid Tuition Program, which is administered by my office, recently opened its third enrollment season. As of this date, families all over the state have enrolled approximately 6,000 of our children into the program, and over $17 million has been invested on behalf of these children. The number of children enrolled last year exceeded our initial projections by more than 83 percent. I am proud to say that I have a personal interest in the program, as both of my daughters, Katherine, age 2 years and Caroline, age 4 months, are Nevada Prepaid Tuition participants.

After two years of operation, I think we can determine reasons why this program has been so widely accepted by the public. National surveys suggest that parents and grandparents consider saving for their child's higher education as important as saving for retirement. We've also learned that while extreme concerns exist among parents regarding the rising cost of college as it continues to out pace the rate of inflation, most families save too little and start too late. Families have found it difficult to maintain the discipline to set aside money specifically for college. Also, federal college assistance has shifted from grants and scholarships to predominately loan based programs, which has resulted in graduates being mired in debt as they begin life after college.

Let us talk about price increases. The price of necessities, such as food, rent and gasoline, has certainly increased during the past decade. How would you like to be able to lock in the lowest price during the last 10 years and be able to pay that for the food, rent and gasoline you need in the future? The Prepaid Tuition Program works that way.

The beauty of the Prepaid Tuition Program is that it allows parents to lock in today's cost of tuition as their future rate, regardless of how much tuition increases at the state's universities and community colleges. For instance, a parent with a 20-year-old can prepay four years' tuition over a five-year period and have their tuition paid for by the time their child starts the third grade. They will have the same amount of tuition that a freshman entering UNR or UNLV pays today, absent 15 years of tuition inflation. That's real peace of mind, knowing your child's higher education is paid for at a rate that is very affordable.

Our participants also like the fact that they do not have to choose a school at the time of enrollment, since the full benefit is payable to any accredited public or private college or university, in or out of the state of Nevada. Parents would, however, have to make up the difference if the out-of-state tuition is higher.

The tax advantages of the program are significant. The purchasers of a prepaid contract never have to pay a dime of capital gains or income taxes on the interest earnings. It may be taxed to the child when they start college at their lower tax bracket. Many college students do not earn enough to pay taxes, and there is legislation pending in Congress to make these qualified tuition plans fully tax exempt.

I have often been asked how the Prepaid Tuition Program works with the Millennium Scholarships. These two programs are completely compatible. You may use your prepaid account to pay tuition and use the Millennium Scholarship to pay all those other expenses including room and board, books, fees, travel, supplies and day care. Together, they will cover most, but not all of the cost of attending an in-state college or university. So you still need to save for college.

All of us connected with the Prepaid Tuition Program are very proud of its success. It is the most affordable, safest and easiest way to save for your child's higher education. Please call our toll free number at (888) 477-2667 to order your free enrollment kit. Your child will be glad you did.

A college education will never cost less than it does today. Lock in today's tuition rate with the Prepaid Tuition Program, and secure the educational opportunity our children deserve so that they may have all the tools necessary to pursue their dreams.

BRIAN K. KROLICKI

Nevada State Treasurer