Wednesday, March 12, 1997 | 11:59 a.m.
Under the proposal presented by Don Hataway of the state Budget Office, parents would be able to make a lump-sum or monthly payments into a state-run fund beginning as early as the child's birth. Then, when the student was ready to attend college, the state would pay his or her tuition.
Hataway told the Ways and Means Committee the difference between what the parents paid into the fund and the cost of tuition and fees would be covered by interest income earned by the fund. He said another fund could also be set up to cover books and other expenses.
Using Florida's program as an example, he said a parent would pay a different amount monthly or as a lump sum, depending on how long it would be until the child is college-aged. For example, he said a fifth-grader expected to graduate in 2003 would cost parents a single payment of $5,792, or $83 a month until college.
There are about a dozen states that have already started such programs or are developing them.
"My research indicates this would be a success in Nevada, that we could raise between $50 and $75 million in endowments in this state," Hataway said.
State Treasurer Bob Seale said the fund would be managed by his office. He said the key to the fund is that the state would guarantee payment of whatever the actual college tuition would be when the student is ready to attend college.
He also said the success of the fund depends heavily on accurate estimates of how much those costs will go up and management of the money so that it generates sufficient interest revenue to cover those costs.
Assemblyman David Goldwater, D-Las Vegas, questioned what makes the fund better than the programs offered by private investment counselors such as himself.
"Only state programs would be tax-exempt," said Seale. He pointed out that federal law already makes these state-run accounts tax-deferred, and Congress is considering a bill that would make the funds in them tax-exempt.
Jan Evans, D-Sparks, vice chairwoman of the committee, said the idea might help increase the percentage of Nevada high-school students who attend college. But she questioned what happens if a student decides not to attend one of Nevada's universities but one in another state.
"I felt portability is a very important issue here," said Seale. "Obviously, if the child elects to go to Yale or Harvard, we're not going to guarantee the tuition."
He said in those cases, the state would pay whatever it would have to at a Nevada university, and students or their families would have to make up the difference.
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