Governor’s Budget Proposal Seeks To Control Rising Tuition Costs
Ohio Governor John Kasich’s recently introduced state Executive Budget for fiscal years 2016 and 2017 calls for state colleges and universities to control rising tuition costs. While national College Board data show that Ohio’ public colleges and universities have been among the nation’s best at restraining tuition increases over the past five years, the Governor’s Executive Budget advances new proposals to further help control college costs. To ensure that college remains affordable for students and families, the Governor has proposed to limit in-state, undergraduate tuition and general fee increases in FY 2016 to no more than 2% over what the institution charged in the previous year. In FY 2017, the Executive Budget proposal would freeze tuition at each public college and university.
For families with college savings in the CollegeAdvantage Guaranteed Plan, we encourage you to keep apprised of changes to tuition costs at Ohio public institutions of higher education. While we all want college costs to be as low as possible, be aware that the value of your funds is based on WAT value at the time of your withdrawal of funds. WAT, or Weighted Average Tuition, is calculated and published by the Ohio Tuition Trust Authority prior to each academic year. WAT is based on the tuition rate at each of the state’s 13 public colleges and universities for the coming academic year. WAT will fluctuate annually in alignment with tuition costs. Generally, your redemption of CollegeAdvantage tuition units and/or credits will be based on the value of WAT at the time of withdrawal.
The Governor’s Executive Budget is currently being presented and debated in the Ohio Legislature. The state budget deliberation process will continue over the next several months. The details of the Governor’s Executive Budget are subject to change throughout the legislative process before being sent to the Governor for his final approval and authorization. The current budget is set to expire on June 30, 2015. In addition to the Governor’s proposal, Majority Senate Republicans have their own proposal calling for tuition to be cut by 5% beginning next year.
It is prudent for account owners to be aware of any legislative proposals that may affect your 529 college savings. You should also regularly review the current value of your account and the possible future value when the funds would be needed for college. If your savings goals change at any time, CollegeAdvantage Guaranteed Plan account owners are permitted to directly rollover funds from the Guaranteed Plan to any 529 plan, including Ohio’s CollegeAdvantage Direct Plan or Advisor Plan, without penalty.
The Ohio Tuition Trust Authority does not provide investment advice. The information contained herein is informational only and should not be relied upon exclusively to make your investment decisions. Investment options should be selected based on your investment goals, risk tolerance, and savings time horizon.
Posted on March 23, 2015