Rates for Nevada's prepaid college tuition program should increase by 40 to 60 percent, and the state should spend $370,000 to advertise the program, lawmakers have been told.
But state Treasurer Brian Krolicki's plans for the financially troubled program didn't sit well with some Assembly Ways and Means members during a hearing Wednesday.
Panel members said they like the tuition program, but fear the state will wind up being forced to subsidize something that was supposed to be self-supporting.
Under the current system, a parent of a newborn can guarantee payment of tuition for four years at a Nevada university by making a $7,460 lump-sum payment or by paying $149 a month for five years. A parent of a ninth grader can make one payment of $9,630 or can make 41 payments of $266 a month.
The prepaid fund currently has $36 million, and Krolicki said that should grow to about $40 million in a few months as payments come in from program participants.
Krolicki also told the committee he's taking money from another college saving system to help the prepaid tuition plan. That prompted Assemblywoman Chris Giunchigliani, D-Las Vegas, to complain he's "moving money back and forth to keep (the prepaid plan) afloat."
Assemblyman Dave Goldwater, D-Las Vegas, added that if the treasurer's investment portfolio doesn't perform, "the state will have to step up. The state is on the hook."
Krolicki said the big challenge is the rising cost of tuition. The program assumed a 5 percent yearly increase in tuition, but the Nevada system's tuition rose 15 percent in the last two years.
