As a reaction to rising tuition costs and a slow economy, several states have suspended their prepaid tuition programs, which allow people to pay tuition in large blocks based on current market college costs.

In the past, tuition has risen steadily between six and seven percent every year, allowing for standardized pricing of tuition blocks. In the last three years it has been increasing by nine to ten percent annually, making the system of prepayment too unreliable to sufficiently meet current financial demands of education.

People who have purchased these funds are not losing their prepaid credits. However, the suspension will not let anyone begin a contract or add funds to their account until the suspension is lifted.

States such as Ohio, Texas, Virginia and West Virginia are among the many suspending their programs, but they are nonetheless taking measures to assure the state will not have to increase taxes or take other measures to make up for the tuition increases.

“We have enough money and we are paying off all of our obligations,” said communications director for West Virginia’s prepaid tuition plan Nelson Sorah.

There is no expected date for lifting the suspension, but states that have already stalled their plans are looking at indicators such as tuition costs and the stock market in relation to the suspensions.

“The stock market is a really huge factor,” Sorah said. “We have no idea of how long it will last. The market really controls the situation.”

Executive Director of Ohio’s Tuition Trust Jackie Williams said that the suspension of their program would last at least until December 2004. Like West Virginia, they will keep watch on the economy to determine when their plan can continue.

“In the past three years investment returns haven’t kept pace with tuition raises,” Williams said. “The reason we took this action is because we didn’t want to add more financial obligations to the state.”

In Ohio the suspension will take effect January 2004, allowing people with contracts to add up to $2,000 into their accounts until the end of the year.

According to Williams, all 50 states have similar prepaid tuition plans, along with many different plans that aid in investing for college.

For example, the state and federal governments provide tax deductions or benefits with the plans, adding extra incentive for families and future students to purchase contracts, or “credits,” which can pay for up to five years of college in most cases.

An account can be purchased at any age or year in school, and credit plans can be used for undergraduate, graduate or professional school.

“Plans like these help out students so they do not have to take out as many loans or work so much when they enroll in college,” Williams said.

The University of Wisconsin does not have a prepaid tuition program, so there is no risk of suspending any payment programs. Wisconsin’s EdVest program, however, does offer a college savings plan that is invested in over the years. Plans like these are more reliable than prepaid programs in a time of unpredictability.