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Prepaid tuition may spark war

Stanley Tate is sure his "army" - hundreds of thousands of parents - will sway the tide in any skirmishes over the program.

By RON MATUS
Published November 15, 2004

Stanley Tate, the feisty champion of Florida's prepaid tuition program, is convinced state lawmakers will come after his baby next spring. But he's not worried.

Any day now, the program is expected to sign its 1-millionth customer.

"My army just got bigger," said Tate, chairman of the Florida Prepaid College Board.

Not everyone is in love with Tate's brainchild, a wildly successful program that allows parents and grandparents to lock in today's tuition rates for children who won't go to college for years.

Critics say the prepaid program has long depressed Florida's tuition rates, which rank among the lowest in the nation. Without more tuition revenue, they say, the state's universities can't boost faculty salaries. That makes it harder to attract top professors and build high-quality programs.

Hundreds of thousands of families have a different view. Each has purchased at least one of the program's contracts - often on installment - and used it to make college more affordable. The program is expected to snag its 1-millionth customer during the sign-up period that runs through Jan. 31.

"My original goal was 100,000," said Tate, a millionaire Miami developer with close ties to Gov. Jeb Bush.

But success has its downside. The program's financial foundation is based on modest tuition increases - 8 percent annually or less, Tate says. So if tuition is hiked significantly - as university presidents want - the program could crumble.

Lawmakers know that, which is one reason they have refused to grant universities the power to set their own tuition rates. Few are willing to rile hundreds of thousands of predominantly middle-class families.

"That would be political suicide," said Sen. Lee Constantine, R-Altamonte Springs, chairman of the Senate Education Committee.

Constantine said there has been no discussion about dismantling the program, but even talk of revisions can stir anxiety.

Last year, a proposed 12.5 percent tuition increase prompted Tate to fire off letters to every family in the prepaid program, who in turn unleashed a flood of angry e-mails and letters.

The Legislature ultimately approved an 8.5 percent hike.

Still, talk of much higher tuition continues.

Earlier this year, the Council of 100, an influential group of Florida business leaders, proposed raising in-state undergraduate tuition about 14 percent every year for the next five years - roughly double the current rate.

To keep the current prepaid contracts intact, the council recommends plugging $100-million into the program every year for 19 years. For future contracts, it recommends re-pricing - from about $12,000 currently to more than $16,000.

Tate worries about affordability.

In the past five years, 55 percent of the plans have been bought by families making less than $70,000 a year. About a quarter were purchased by minorities.

"I'm going to make sure a kid from a poor family has the same opportunity to go to college as a kid who is rich," Tate said.

How serious a hearing the Council of 100 proposal will get is unclear.

Last month, the Board of Governors, which oversees Florida universities, recommended a package of tuition changes to the Legislature and more tuition-setting power for each school's board of trustees. But it steered clear of the prepaid issue.

"When proposals are on the table, we'll be able to talk about them," said MacKay Jimeson, spokesman for the state Department of Education.

Constantine said chances are good that lawmakers will debate prepaid, but so far, none of them have laid out specifics and there is no consensus in sight.

"There is no compelling reason that says we have to do it this year," he said. "But if a better mousetrap comes along, we might embrace it."

Tate said he's not letting down his guard.

"I don't think we're in the clear," he said. "I intend to fight that issue right down to the wire."

With an even bigger army at his back.

-- Ron Matus can be reached at 727 893-8873 or matus@sptimes.com

[Last modified November 15, 2004, 01:35:26]


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