Providing our students the highest quality education and the tools necessary for success in today’s economy remains a top priority for the Republican Caucus in the Virginia House of Delegates. As families struggle to pay bills and the cost of higher education remains a challenge, it is incumbent upon members of the General Assembly to do everything in our power to make education more affordable. That is why I have introduced legislation — along with Del. Tim Hugo, R-Fairfax — to make it easier for students and families to afford college by lowering the price of Prepaid529 plans. House Bill 1611 will reduce the current cost of an eight-semester contract by more than $3,000.
Virginia students borrow more than $1 billion per year to pay for college. This astounding amount hurts our economy and hinders our students’ ability to advance after college. None of us wish to see students burdened with debt as they enter the workforce and move from one stage of life to another.
Analysis by the Joint Legislative Audit and Review Commission (JLARC) found that Virginia’s Prepaid529 program is 138 percent funded, the highest in its 21-year history, and actuarially sound, which prompted JLARC to recommend the General Assembly consider measures to improve program affordability. JLARC’s recommendation was the genesis of House Bill 1611.
The Virginia529 board currently sets the Prepaid529 tuition contract price, which includes a 10 percent pricing reserve in excess of what is needed to meet future benefit commitments. The revenue collected through this additional pricing reserve is used to mitigate potential risk to the fund. House Bill 1611 will cap the pricing reserve at 5 percent if the program is more than 105 percent funded, as it currently is. Should the plan’s funded status drop below 105 percent, the board may increase the pricing reserve rate up to 10 percent and must provide a written explanation to the General Assembly for the new pricing reserve rate.
The Prepaid529 program was created to make higher education more accessible and affordable and we should be striving to do that at every opportunity. This bill keeps Prepaid529 Plan costs in check, while still ensuring the program’s long-term fiscal health. It will have an immediate and significant impact on families’ bottom lines, and will help our students and families maximize their investments in the plan.
As chairman of House Committee on Education, I know every Virginia student deserves access to a high-quality education. Last session, I introduced House Bill 3, which would ensure that students who attempt to cut down on the cost of college by completing dual enrollment courses in high school will actually receive the credit they are due. House Bill 3 is now law.
While there is no magic bullet to address the challenges associated with higher education, we continue to seek ways to lessen the burdens our students face, and House Bill 1611 is another step in the right direction.
Delegate Hugo and I urge our colleagues in the General Assembly to pass this commonsense legislation. Who could argue with saving Virginia students more than $3,000?