By Kristina Goetz
The Cincinnati Enquirer

Ohio families participating in the state's guaranteed college savings program could see big changes next year.

With the combination of rising tuition costs and low investment returns, states across the country are beginning to raise prices, limit participation or do away with the programs together.

An informal group of tax, legal and actuarial advisers has been meeting for several months to study Ohio's options and will report recommendations to the Ohio Tuition Trust Authority during the first quarter of 2003.

"The plan is safe in terms of the monies invested," said Jacqueline Williams, executive director of the Trust Authority, the state agency that oversees the savings programs.

"That's very important to underscore. With respect to whether or not the same program that is offered today will be offered tomorrow for everyone who wants to participate, that's clearly one of the issues that will be up for discussion."

Each state has its own college savings plans, commonly referred to as 529s. In Ohio, CollegeAdvantage offers two types, the Guaranteed Savings Fund and Variable Investment Funds. The guaranteed option has been fully backed by the state since its inception in 1989 and allows account holders to buy tomorrow's tuition at today's prices.

But unprecedented tuition hikes and a sluggish economy have forced states, including Ohio, to re-examine their plans. The key, Ms. Williams said, is to keep prices affordable while limiting liability.

Potential changes to Ohio's guaranteed option could include:

• More frequent increases in the price of tuition units, which are based on 1 percent of the weighted average tuition cost at Ohio's 13 four-year public universities. The program has seen six price jumps since October 2001, for a total of 45 percent.

• Limiting participation to those already enrolled in the plan.

• Changing the payout value for new enrollees.

• Developing a new product entirely.

"We've been in discussion with other states that have similar programs for well over a year," Ms. Williams said. "They're trying to weigh all the options just as we are."

Families in Colorado have seen the most dramatic changes. The state closed its prepaid plan to new investors as of Aug. 1 and told existing participants that their investments may not cover tuition increases in the future.

Florida is considering whether to restrict its program to only low-income families and students.

Both Maryland and Illinois have raised their prices by more than 20 percent, and Wisconsin stopped selling its plan earlier this month.

One state that has avoided dramatic stock market declines is Kentucky, where a college plan was implemented in October 2001 - after some of the steepest market drops.

In the past year, the cost of the program has increased 7.6 percent. Under the commonwealth's plan, increases are adjusted at the same rate as tuition increases at the university with the highest costs. During that time period, the school with the highest tuition was the University of Louisville.

E-mail kgoetz@enquirer.com