Looking to make higher education more affordable, state lawmakers Tuesday moved forward with a plan that would lower costs in the Florida Prepaid College Program -- and lead to about $50 million in refunds for some already-enrolled families.
The Senate Education Committee unanimously approved a bill (SB 732) that would revamp a formula that determines how much families pay to cover the future tuition and fee costs for their children. While the details of the formula are complex, the bill would essentially undo changes made in 2009 that have driven up costs.
"This is obviously a significant bill for the families of Florida,'' bill sponsor Bill Galvano, R-Bradenton, said.
Senate President Don Gaetz, R-Niceville, and House President Will Weatherford, R-Wesley Chapel, signaled last month that they would push to reduce costs in the prepaid program, which is formally known as the Stanley G. Tate Florida Prepaid College Program, after a Miami businessman who was integral in its development.
As an example of the effects of the new bill, a Senate analysis said a family enrolling a newborn during the 2012-13 year in a four-year university plan under the prepaid program is currently paying $332 a month. If SB 732 ultimately passes, that price would drop to an estimated $255 a month.
Also, the analysis said that 26,000 families would be entitled to about $50 million in refunds. Those families purchased prepaid plans in recent years after prices increased.
The 2009 changes in the payment formula came as lawmakers approved allowing universities to raise tuition by as much as 15 percent a year -- a concept known as a "tuition differential." The Senate Education Committee on Tuesday backed another bill (SB 7036) reducing that maximum amount from 15 percent to 6 percent.
Reducing the tuition differential to 6 percent would help bring down projected costs in the prepaid program. But Galvano said SB 732 will have more of an effect because of changes related to the program's actuarial reserves.
Gov. Rick Scott has made a priority of holding down tuition rates, and a member of his staff indicated to the committee Tuesday that Scott supports the proposed changes in the prepaid program. Galvano said the House is expected to move forward with the proposal as part of a committee bill.