[Congressional Record Volume 142, Number 116 (Thursday, August 1, 1996)]
[Extensions of Remarks]
[Pages E1443-E1444]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           SAVING FOR COLLEGE

                                 ______
                                 

                       HON. CONSTANCE A. MORELLA

                              of maryland

                    in the house of representatives

                        Thursday, August 1, 1996

  Mrs. MORELLA. Mr. Speaker, in an effort to help families save for 
college, I am introducing a resolution to encourage States to adopt 
programs that will allow parents to pay for their child's college 
education years in advance and at a fixed rate.
  Throughout history, American families have believed that a good 
education provided the path to a better life. Indeed, the earnings 
advantage of completing college increased between 1970 and 1993 for 
both males and females. According to the Department of Commerce, a 
person with a bachelor's degree will average 55 percent more in 
lifetime earnings than a person with a high school diploma.
  However, college costs have risen rapidly in both public and private 
institutions. Over the past 15 years, the average tuition at private 
colleges has increased 90 percent, and at public institutions tuition 
has risen 100 percent. Moreover, the median family income during the 
same period rose only 5 percent.
  For most Americans, student loans are the primary source of education 
funding. From the G.I. bill to Pell grants and the Stafford Loan 
Program, financial aid has enabled millions of working class families 
to send their children to college. While one option in addressing the 
rising cost of college would be to increase student financial aid, a 
sensible alternative approach would be to encourage families to save 
for college.
  Several States have adopted ``tuition prepayment programs'' that 
offer families a systematic approach to saving for college. These 
prepaid tuition programs provide families with a plan under which they 
can set aside a fixed amount each month, based on the number of years 
remaining before the beneficiary enrolls

[[Page E1444]]

in college. Under most of these plans, participation guarantees that 
tuition will be ``locked-in'' at today's prices, helping families fight 
inflation.
  The State of Florida has an excellent program that has been operating 
for eight years with great success. Florida has sold more than 327,000 
contracts to residents planning ahead for their children's college 
education. I am pleased that my own State of Maryland is planning to 
adopt a prepaid tuition program to help residents who are concerned 
about preparing for their children's future.
  There are several reasons for encouraging more States to adopt plans 
that promote college savings:
  Additional savings might enable some students to consider more 
expensive public as well as private schools. Consequently, families 
will have more choice as to which schools their children might attend. 
Additional savings may enable a student to live on campus rather than 
at home, and to attend school full-time rather than part-time.
  Savings for college encourages parents to begin thinking about their 
children's education and planning for their future. Planning ahead 
might encourage parents to set higher educational standards and goals 
for their children.
  Providing plans to encourage college savings reduces the need for 
student loans, which could reduce student debt and the student default 
rate.
  Mr. Speaker, I have long supported measures to help students pay for 
college. At present, approximately 500,000 families nationwide 
participate in tuition prepayment programs that make college more 
affordable for middle-class families. I believe that all of our States 
should provide prepaid tuition or other savings plans to give American 
families everywhere the opportunity to save for their children's 
college education in advance. Helping our nation's families send their 
children to school is crucial to the economic strength and the cultural 
growth of our country.

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