Its promoters say Maryland's Prepaid College Trust is a great deal, but a lot of parents apparently haven't gotten the word.
The first sign-up for the state-supported college savings plan drew to a disappointing close yesterday, with about 1,050 applications received by midafternoon.
Ellen Markowitz, the program's administrator, said she expected a flurry of last-minute applications to arrive in the mail early next week.
The enrollment period, which began in April, was extended by a month to allow more time for promoting the trust. But even so, the final tally is likely to fall well short of the 16,000 who signed up in the first year for a similar college savings plan that began in Virginia, in 1996.
"We're not as happy as we might be," said Edwin S. Crawford, the trust's acting executive director. He attributed the lukewarm initial response to delays and malfunctions in getting out information about the plan.
State Sen. Edward J. Kasemeyer, a chief sponsor of the bill that authorized the program, blamed the "disappointing" sign-ups on poor timing by trust officials. The bestpromotion for the savings plan would have been to send information home with elementary and secondary school students for their parents, Kasemeyer said. But the information did not get to schools before they let out for the summer.
"They shouldn't have started when they did," said Kasemeyer, a Democrat from Howard County, who called it "dumb timing" to begin promoting the plan as summer vacation began.
After spending $400,000 marketing the savings plan this year, Crawford said, trust officials are mapping out an improved and much more extensive promotion campaign for next year's sign-up.
"We're planning to spend a lot of time in September with PTAs, private schools, church groups, community leaders" to explain the trust, Crawford said.
How it works
Under the program, parents planning to send a child to a community or four-year college can sign a contract agreeing to pay tuition and fees at current rates, in a lump sum or in monthly installments. Though there is no guarantee, the payments are invested by the trust with the intent of earning enough interest to cover increases in college costs.
A family may deduct from state income taxes a total of up to $2,500 of payments made into the trust, and the interest earned is exempt from state taxes.
Payments intended to cover four years of college tuition can vary from $131 a month for 216 months for an infant to $17,289 in a lump sum for a 10th-grader. The payments for next year's sign-up are likely to be different, probably higher, as college costs continue to climb.
Competing with other plans
Crawford said he also might seek to expand the trust to appeal to parents who want to save more money. The add-on savings plan would be intended to pay for room and board or for more costly out-of-state or private school tuition, he said.
That and other changes could help the Maryland trust compete with other college-savings plans. A South Carolina firm has begun promoting savings plans geared specifically toward prepaying tuition to costly private schools, including Goucher and Loyola colleges in Maryland.
Kasemeyer said Maryland's plan has plenty going for it, but it needs better promotion.
"It will be very appealing once people are aware of it," he said.
Pub Date: 8/01/98