Despite an unprecedented 35 percent increase in the cost to participate in Ohio's guaranteed college savings program, the number of families enrolled is on the rise.

        Each state has its own college savings programs, commonly referred to as 529 plans. In Ohio, CollegeAdvantage offers two options, the Guaranteed Savings Fund and the Variable Investment Funds.

        Formerly called the Ohio Prepaid Tuition Program, the guaranteed option is fully backed by the state and allows account holders to buy tomorrow's tuition at today's prices.

        Since Sept. 30, the cost per unit has risen from $51 to $69. For the first time since its inception in 1989, the Ohio Tuition Trust Authority increased the price per tuition unit in the guaranteed savings plan twice after the annual October adjustment.

        Nevertheless, 10,810 new families enrolled in the program from Oct. 1, 2001, to March 31, 2002, compared to 4,200 families during the same period the previous year. Overall, there are 116,000 guaranteed fund accounts.

        The first bump, which took effect Jan. 15, was in reaction to colleges across Ohio announcing midyear tuition increases. That took the unit price from $56 to $59.50.

        The second increase, from $59.50 to $69 per unit, took effect April 1, after the Tuition Trust changed its tuition growth projections because of increased uncertainty of future tuition increases.

        “I could not tell you whether there's going to be another one or when,” said Maureen O'Brien, marketing director for the Tuition Authority. “We are carefully monitoring what universities are doing.”

        Two factors are fueling the increased participation in the program, Ms. O'Brien said:

        • Tax law changes took effect Jan. 1 that make withdrawals from a 529 plan tax-exempt if the money is used toward qualified education expenses.

        • With increased attention on the skyrocketing cost of a college education, more families are investigating payment options.

        “It really has drawn attention to the need to plan and save,” Ms. O'Brien said.

        In Kentucky, April 15 was the deadline for people who wanted to participate in Kentucky's Affordable Prepaid Tuition, or KAPT, program. Another enrollment period will be held in the fall, said Kentucky State Treasurer Jonathan Miller. The commonwealth has 4,210 enrollees in its program, which began last fall.

        Ms. O'Brien said she hasn't heard much reaction from Ohio families about the increases.

        “They understand,” she said. “They are following the news. I think they would prefer we didn't have to increase the price, but ...”

        The price jump won't affect the way one Middletown family saves for their child's tuition. Kathy Herron's son, C.J., is a sophomore at Xavier University, and the family is now focused on putting money away for his senior year.

        “It really isn't going to change as far as what we do,” Ms. Herron said. “I always have a set amount taken out of our savings account on the 15th and on the 30th. It was an easy way, a guaranteed way to save for our boys' college.”

        For information about the Ohio program, call (800) 233-6734 (AFFORD IT) or log on at www.collegeadvantage.com. For information on Kentucky's program, call (888) 919-KAPT or log on at www.kytreasury.com/KAPT

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About the tuition program
       

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