It is called a contract. It defines the rights and obligations of parties. Unfortunately, this particular contract was not worth the paper it was written on.

The Texas Tomorrow Fund, faced with possible bankruptcy, is drastically cutting its payout on canceled contracts, angering many parents who signed up for the fund between 1996 and 2003.

The now-closed fund, later renamed the Texas Guaranteed Tuition Plan, allowed parents to prepay for tuition at locked-in rates and promised that if a child died or received a full scholarship, parents could cancel the contract and receive a payout based on current tuition and fees at public universities.

Tuition is three times what it was 10 years ago, so the payout would mean a windfall for many families.

But last week, a letter went out saying that in case of canceled contracts, the state would reimburse only the amount parents paid into the fund, minus administrative fees of around $36 per year.

This isn’t a little change – it means that those who were promised a return for their money will instead receive back less than they paid in. It means that the families of students who did well in school and qualified for scholarships get screwed. And it is totally unacceptable.

Posted by: Greg at 10:13 AM | No Comments | Add Comment
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