The cost of putting his two children through an in-state college probably will be $45,000 more by the time they’re ready to enroll, but Ned Martin doesn’t fret.
Reading that the tuition rate of University of Nevada, Las Vegas has increased for five consecutive years — marking a
73 percent increase since 2007 — doesn’t spur a panic attack either.
No matter what, he will be paying $7,600 each in tuition for his children to attend four-year universities, not including fees.
That was the tuition rate in 2001 when his children were 1 and 3 years old. And that is when he signed a contract with the Nevada Office of the State Treasurer, freezing what he will pay for college tuition though his children would not enroll for nearly two decades.
Any parent can do the same by signing into Nevada’s Prepaid Tuition Program, available to all Nevada parents or relatives with children ranging from newborns to ninth-graders.
The earlier a family signs on, the more they will save, like Martin. When the time comes for college, parents don’t have to pay a dime more for credits no matter how far rates climb, state Treasurer Kate Marshall said.
“As our slogan says, ‘Promise made. Promise paid,’u2009” Marshall said.
However, the annual window for signing up closes Thursday and won’t open again until December, and the rate probably will increase.
For the first time in the program’s 14-year history, the College Savings Board decided to not increase the contract rate this year though tuition rates increased.
“We made a decision to do everything we could to keep prices as affordable as possible,” said Marshall, who chairs the College Savings Board.
The current cost of a contract is $22,510 for a four-year university for a child currently in second grade. Families can pay the state all at once when they sign on, spread payments over five years or pay month to month until their child starts college.
Contracts are available for two- or four-year schools. And children will be covered at any Nevada college, including specialty schools, such as culinary institutes. The money can be used out of state at eligible institutions nationwide. However, the program will cover only the equivalent of Nevada’s current tuition rate. If it costs more, parents have to make up the difference.
If a student gets a scholarship or doesn’t go to college, parents can be refunded their payments, or the contract can be transferred to another child, even a cousin.
Signing on the dotted line seemed like a no-brainer to Martin, who isn’t without a financial acumen. He is chief financial officer for American Casino Entertainment Properties, which owns the Stratosphere and Arizona Charlie’s locations in Las Vegas and Aquarius Casino Resort in Laughlin.
He was considering a 529 college savings plan, investing the money himself, or “you can do nothing and hope the money is there,” he said.
“But, as a parent, I want to provide my children with every opportunity,” said Martin, emphasizing that without a college education, most opportunities would be outside their reach.
This way, the state takes all the risk.
It puts the money collected from families in a fund now. The money is invested, building up the amount to cover the increased cost of tuition when the time comes.
Marshall said many states once had similar programs, but only 10 other states offer it now.
Those are Alaska, Florida, Maryland, Illinois, Michigan, Massachusetts, Pennsylvania, Texas, Virginia and Washington.
The others — Alabama, Colorado, Kentucky, Mississippi, Ohio, South Carolina, Tennessee and West Virginia — didn’t invest their money well enough to weather the recession and called it quits when their funds ran dry, she said.
With $159 million in Nevada’s fund, the program is 105 percent funded. That means if families of all the open contracts immediately cashed out, the fund could pay them all and have $7.24 million left over.
The board has adopted a plan to make the fund reach 120 percent. The board invests conservatively, said Martin, who joined the College Savings Board at the request of the governor in 2010, nine years after he signed contracts for his two children.
“We’re lucky in Nevada,” he said. “Not many states have these programs anymore.”
Contact reporter Trevon Milliard at email@example.com or 702-383-0279.