Tuition Credits Bill Off To A Running Start
The Assembly Higher Education Committee passed Assembly Bill (AB) 152 yesterday by a vote of 5 to 2. Assembly Member Jim Beall, Jr. (D - San Jose) authored AB 152. He believes this bill will help California’s families save for college.
AB 152 will establish the California Prepaid Tuition Program. This program will enable parents, grandparents, and family members to buy their children’s future tuition today.
AB 152 allows families to buy college tuition units for future education. The price for units will be based on one year’s tuition at the University of California (UC) plus a premium that will sustain the fund. That total will then be cut into one hundred units. Families will then be able to buy these units. When the student goes to college, the benefit will equal what UC tuition has become.
Students will be able to use this money at any college that qualifies for federal student aid programs. This includes most public and private colleges in the country. If the tuition is less than the value of the units bought, the extra money can be used for other school expenses. Since AB 152 will establish a 529 program, the tax benefits would be the same as other college savings programs.
"AB 152 is going to allow parents, grandparents, family members and guardians to buy their kids future higher education today, helping them realize their dreams of going to college,” said Assembly Member Beall.
In 2001, a year’s tuition at the California State University (CSU) was $1,876. At the UC tuition was $3,958. Today, tuition at the CSU is $3,199, a 70% increase. UC tuition is now $6,802, a 79% increase. By allowing families to buy their children’s future tuition now, the program will insulate families from the effects of future increases.