Plans’ appeal rises with tuition; It’s college decision time for the Class of 2025; Parents rush to lock in rates for Texas savings program

By Joshua Benton
Staff Writer

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It’s a tough choice: Write a big check now or a huge one later.

Texas parents have 15 more days to make up their minds.

The Legislature is considering a steep hike in college tuition, perhaps more than 60 percent over the next two years. As a result, the Texas Guaranteed Tuition Plan, which lets parents pay Junior’s future college tuition at today’s cheaper rates, has seen interest boom.

The number of people signing up for the plan – formerly known as the Texas Tomorrow Fund – is up 37 percent over last year at this time. Officials expect a huge rush in the final days before this year’s deadline to sign up, May 23.

Some financial advisers say rising tuition and economic forces may conspire to make this the last time the guaranteed tuition plan is such a deal. In the future, families may find a better investment elsewhere.

“People signing up are going to be paying a premium,” said Joe Hurley, a CPA who runs Savingforcollege.com. “They’re really making a gamble.”

For decades, Texas was one of the cheapest places in America to get a college education. But it’s catching up to the pack. Average tuition at a four-year Texas university jumped 63 percent in the 1990s, even after adjusting for inflation.

It’s not yet clear how much freedom the Legislature will give universities to raise tuition. A bill passed by the House last month would raise the cap on tuition 61 percent over the next two years and give some colleges free rein to charge whatever they’d like in 2005. A Senate version of the legislation allows smaller increases – up to 17 percent between now and 2005.

Some sort of compromise is likely, but even then, not all universities will raise tuition to the maximum allowed immediately.

Those are the sort of increases the Texas Tomorrow Fund was created to battle in 1996. The idea was simple: Parents pay for college ahead of time, either in a lump sum or monthly payments. The state invests the money; if all goes well, the investments grow faster than tuition does and there’ll be plenty of money to pay for children’s college down the road.

“You’re getting a guaranteed return on the money you’re putting in, since tuition keeps going up” said Henry Tow of Plano, who signed up two of his children last month. “I know I won’t be losing money.”

It’s clear that those who bought in early got a deal. In 1996, the parent of a newborn could have bought four years at a state university for $8,320. That costs $17,460 today.

If that $8,320 had been invested in a common stock index fund instead, it would be worth only $11,730. Move the starting date forward a couple of years – to the late-’90s stock bubble – and many parents would be in the red.

“You were a genius if you bought a plan in ’96,” said Andy Ruth, director of special programs in the state comptroller’s office, which runs the program. “People who bought back then can congratulate themselves. They were very smart.”

He said interest in the program has picked up in the last few years, as the stock market’s troubles make people seek sure bets.

What’s unclear is how good of a deal the guaranteed tuition plan will be in the future. After all, the plan’s theory is based on getting good returns from investing the parents’ up-front cash – returns that grow faster than tuition. Instead, Texas has had a stagnant economy and spiking tuition.

Payout concerns

Bryan Clintsman, a Southlake financial planner, often advises his clients against the guaranteed tuition plan. His argument: If the fund has given such a great deal to its early adopters – paying out more in tuition than it received upfront and earned from investments – it has to make up the difference somewhere.

Mr. Clintsman thinks that somewhere will be the pockets of parents joining the plan in the next few years.

“You’re paying a premium for the people who got in before you,” he said.

It’s a problem that other states are already facing. In March, West Virginia officials announced they would not allow any new parents to sign up for the program for one year. Last August, Colorado officials informed its program’s parents that the state may not be able to pay the full cost of tuition and offered them a chance to withdraw their money.

Such a scenario isn’t likely in Texas. The fund is backed by a trust fund created by a constitutional amendment, and the state guarantees that all program obligations will be met, with tax dollars if necessary. In Colorado, no such guarantees were made.

But that doesn’t mean the price won’t go up. In Florida – home to the nation’s largest prepaid tuition plan – officials have said they may need to double the price of a contract next year if the state Legislature increases tuition as much as being considered.

“It puts a financial strain on these programs whenever there’s a large increase,” Mr. Hurley said.

It’s impossible to know how much the price of a Texas contract might increase, Mr. Ruth said. The prices are set using a complex actuarial formula, based largely on what tuition rates are at Texas schools each fall and their projected rate of increase.

“Just because it’s been a great deal for people in the past doesn’t mean it won’t be a great deal for people in the future,” he said.

Sister plan

Mr. Clintsman and other advisers said they were steering their clients to the state’s sister plan: Tomorrow’s College Investment Plan. It’s what tax aficionados call a 529 plan, and it functions like a 401(k), allowing money invested to grow tax-free.

It lacks the guarantee that the other plan does – it’s possible to lose money in a 529 savings plan. But it does have a few advantages.

First, the guaranteed tuition plan covers only tuition and required fees – not the costs of room, board, books and other costs, which can in many cases add up to more than tuition alone. “Tuition’s just a piece of the pie,” said Bob Stowe, a Plano financial adviser. “You’ve got to take care of everything else, too.”

Second, if students are eligible for financial aid, the guaranteed tuition plan can limit the size of the grants they can receive. For every $100 accumulated in a guaranteed tuition plan, a student is eligible for $100 less in aid.

The 529 savings plan is treated differently: For every $100 saved, a student loses only $6 in potential financial aid.

When Doug and Patti Overstreet of Fort Worth started thinking about their college options for their 6-month-old son, Cole, they considered the guaranteed tuition plan. They found it attractive but ended up choosing the 529 plan.

“Eighteen years really won’t be that long,” said Mr. Overstreet, a claims adjuster. “Your money doesn’t have that much time to work for you. You’re going to look up one day and you’ll be starting elementary school. Then middle school, then high school. College will be here soon enough.”

Plan worries Head Start supporters; Program’s reading, writing, ‘rithmetic may face review; Standardized testing among Bush’s ideas to gauge effectiveness

By Robert Dodge and Joshua Benton
Staff Writers

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When Oscar Fuentes enrolled at the Jerry Junkins Head Start Center in West Dallas, he never spoke. “All he would do is point at things,” said his mom, Rosa.

It turned out he had a speech impediment. But with hard work and therapy, he has overcome it. Ms. Fuentes credits the Junkins center and goes 30 minutes out of her way to drive him there.

“He’s so ready for kindergarten now,” Ms. Fuentes said about her 5-year-old son. “The program has helped him enormously. I wouldn’t want to change anything about it.”

That program is Head Start, which for 38 years has been among the federal government’s most popular programs with Democrats and many Republicans.

But now, President Bush argues, it is time to find out if the $6.8 billion health and education program is earning passing grades. The president’s concern: Head Start programs have neglected literacy and math skills, turning their facilities into federally funded baby-sitting services.

The White House has offered proposals consistent with the president’s desire to measure educational performance. But the initiatives have stirred protest among Head Start’s supporters, who say the program is working and needs to be expanded, not overhauled.

“We think it has been successful, but we think it can be more successful,” Health and Human Services Secretary Tommy Thompson said “… And that is why we want to reform it, strengthen it and make it better,”

The president’s proposals, which will be included in this year’s Head Start reauthorization bill, start with a plan that has stirred harsh criticism within the Head Start community. It calls for giving the program’s 900,000 children a 15- to 20-minute standardized test.

The idea is not to assess individual students but to collect a body of data to find out whether local programs are effective in teaching basic literacy and math skills.

Mr. Bush also wants to move the program from Health and Human Services to the Education Department. And the president wants to give states the option of taking over the federal program so it can be aligned with local education systems – an idea that foments anxiety in financially stressed states such as Texas.

All the proposals are sparking a loud outcry from Head Start officials, who question whether the administration’s proposals are designed to undermine and eventually end the program.

“Let’s stop the cynical word games that are being used to describe the dismantling of Head Start as something that somehow will improve it,” said Ron Herndon, chairman of the NationalHead Start Association.

At Head Start of Greater Dallas, which provides services to about 4,000 children, the White House proposals have introduced an atmosphere of uncertainty. Officials there say they share concerns that cash-strapped states will divert Head Start funds to other uses, such as patching potholes.

“We’ve got a program that’s worked incredibly well for 30 years, and I don’t see the need to change it,” said Rob Massonneau, external affairs director for Head Start of Greater Dallas.

Critics worry that any changes that could lead to less funding would undermine Head Start’s success in providing children with critical nutritional and health services. And they believe transferring the program to the Education Department would signal a shift away from providing social support.

“These are poor families that need help,” said Dallas Head Start teacher Blanca Esparza. “We take kids to the dentist. We make sure they get all their shots. If the parents need something, we find a way to get them the resources they need. Whatever problem they have, we deal with it.”

More funding sought

Other Head Start supporters said the White House would do better to fully fund the program. Only about 38 percent of eligible families, or those generally below the federal poverty rate, are able to participate.

Without fully funding Head Start, said Rep. Ruben Hinojosa, D-Mercedes, it is too early to be testing participants. “They have other underlying requirements that have not been met to have school-ready children by kindergarten,” he said.

The administration sees the Head Start proposals as a natural follow-up to No Child Left Behind. The 2001 law holds states accountable for ensuring that all children are proficient in reading and math – a requirement that puts pressure on early-childhood programs to turn out school-ready children.

Since its inception in 1965, Head Start has been charged with helping poor children develop the same literacy, verbal and math skills as their middle-class counterparts. The program also provides comprehensive health, dental and nutritional services.

The White House contends that children in Head Start programs are not catching up significantly with students from more affluent households. The administration points to studies that show Head Start children not only lag behind their peers but also lose any gains by second or third grade. (Head Start supporters point to studies showing the opposite.)

Even critics of the president’s proposals doubt that Head Start is living up to its promise. “The quality in Head Start is uneven at best,” said Samuel J. Meisels, president of the Erikson Institute, a Chicago child development graduate school.

Despite criticisms, many of the nation’s 1,400 local Head Start programs are doing fine work, experts said.

For instance, the 36 Head Start centers in Dallas probably will not have to worry about efforts to increase the quality of literacy programs. Both the president and first lady Laura Bush hold up Dallas’ curriculum as a gold standard.

The curriculum, called LEAP and designed by Nell Carvell, a childhood literacy expert at Southern Methodist University, puts a strong emphasis on pre-reading and vocabulary development. The idea is to correct one of the biggest disadvantages poor students face: living in an environment that is not rich in words.

Program’s success

The Language Enrichment Activities Program was introduced in 1994 at Dallas’ Margaret Cone Head Start Center and started producing results right away. Reading scores soared. Julia Frazier Elementary, the South Dallas school that most Cone center graduates attended, produced some of the highest test scores in the state despite a heavily poor student body drawn primarily from the Frazier Courts housing project. The curriculum has since spread to all Dallas Head Starts.

“Before, the kids could recognize their own name, and that’s about it,” said Ms. Esparza, who teaches at the Junkins center. “Now they’re actually putting words together and reading.”

“It’s almost a 100 percent difference” from before, said Dallas teacher Jeannette Easley.

The White House wants to see more Head Start children acquire the same skills, and thus the testing proposal put forward by the president.

Trials of the tests have been lasting 15 to 20 minutes. They are kept simple – for instance, calling on students to identify words and letters.

But critics contend young children cannot focus on tests and the results will be unreliable. Moreover, they argue that children are easily distracted by stressful living conditions and poor health.

The testing plan, and other proposals, are raising questions on Capitol Hill, where lawmakers are expected to weigh in as spending for Head Start is reauthorized this year.

“As the father of a 5-year-old, it is hard to imagine him sitting still in a chair long enough to give him any form of a comprehensive test,” said Rep. Chet Edwards, D-Waco.

Wade Horn, assistant secretary for children and families in the Health and Human Services Department, contends the tests would not be used to evaluate the progress of individual children. Instead, he said, the results from each test would be added together to get a snapshot, or average, of how a local program was doing relative to other facilities.

“We are not developing an entrance exam for kindergarten,” Mr. Horn said.

Exam prototypes

The government is paying $1.8 million for the tests to be developed by Westat, a privately owned company in the Maryland suburbs of Washington.

Nicholas Zill, a psychologist who is leading the effort at Westat, said a prototype of the exams is being tested on 1,300 children at 36 Head Start centers nationwide. The initial round of testing will be completed this month and should be ready in the fall to be given to about 500,000 4- and 5-year-olds. Mr. Zill said it is true that young children are difficult to test – but he said averaging produces reliable results.

Critics contend Head Start instructors will manipulate the tests by prepping children, fearing that if their facilities do poorly they will lose federal funding – and their jobs.

“High-stakes testing has limited value,” said Stephanie Fanjul, director of the student achievement department at the National Education Association, a professional group representing 2.7 million teachers.

Craig Ramey, an expert at Georgetown University who chairs a panel advising the administration on the testing system, said test results could be used to spot troubled programs and help the staff improve the facility.

“The president wants to be sure that kids in Head Start get the full benefit of what Head Start is intended to do,” he said.

Mr. Thompson, the health and human services secretary, bristles at the notion that the Bush administration wants to dismantle the program, writing off opposition as bureaucratic intransigence.

“There is a tremendous, innate force in all federal programs to maintain the status quo,” he said. “The bureaucracy in every department is the same way: ‘It is the way we have done it, it is the way we are going to do it, and Tommy Thompson will be gone someday and it is the way we will keep doing it.'”

Column: To limit or not to limit time spent taking TAKS

By Joshua Benton
Staff Writer

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When kids take the SAT, they have to answer 138 questions in two and a half hours.

The ACT asks 215 questions in a little under three hours.

A typical TAKS test has between 40 and 50 questions. So why are some kids taking six or seven hours to finish?

The simple answer: Because they can. Whether they should is a different matter.

The TAKS, like the TAAS before it, is untimed. Kids, who typically start the test around 8:30 a.m., can work into the night if they like. In some schools, most students are still testing at 1 p.m.; in many, at least a few stay past the final bell, No. 2 pencil still in hand.

The result, often, is kids who are exhausted and drained – but not necessarily higher test scores.

“Once you get beyond five hours, you’re really seeing diminished returns,” said Seppy Basili, a vice president at test-prep giant Kaplan. “I can’t emphasize enough you’re not going to see any return. You can make the kid so nervous that it’ll backfire on you.”

Testing is a big deal in Texas. In certain grades, kids have to pass a test to go on to the next grade or graduate from high school. Schools get rated on how their students fare. So it’s not surprising that people try to drain every last correctly filled bubble out of a kid.

If it’s a math problem, teachers tell the kids to repeat their calculations several times. If it’s a reading passage, students are expected to go over it four times, underlining some sentences, circling others, bracketing others.

But is that sixth time going over every answer really going to help? Do answer sheets really improve in the eighth hour of testing?

“There’s a point when you start making up stories to convince yourself you have the wrong answer,” said Ben Paris, director of test preparation for Peterson’s. “You say, ‘Have I really given ‘A’ a fair chance?’ You wind up making good arguments for every answer.”

“Children end up cycling – changing it one way, changing it back, changing it again,” said Bruce Thompson, a professor at Texas A&M who studies testing. “I’m not satisfied any child gains anything from checking more than twice.”

The people who run tests such as the ACT say they keep their lengths to about three hours because they know high school kids can wear out after long stretches of concentration. If so, what about 9-year-olds?

The educators I spoke to tended to support untimed tests to give all children as much of a chance as they can. “Students work at different speeds,” said Debbie Chisolm, principal of Dorsey Elementary in Rowlett, where some kids worked on last week’s TAKS from 8:30 a.m. to 3 p.m. “Our goal is to assess what they know, not their speed. Some kids are very meticulous.”

Parents were less unanimous. “The parents I speak with say that there should be a reasonable amount of time given,” Plano parent Debrah Chockley said. “The kids are either able to do the work, or they’re not. There’s no need for them to keep dwelling on it all day.”

Don McLeroy, a State Board of Education member from Bryan, has been lobbying to time portions of the TAKS. He thinks you don’t get a real gauge of a child’s skills without a stopwatch ticking.

For example: Kids should know how to multiply five times eight. But because they have all the time in the world, some can get away with actually drawing five little bunches of eight lines and counting them all up.

“I want to know if basic math for these kids is automatic,” he said. “If they haven’t mastered these basics to the point that they can answer them quickly, it’s going to hurt them later on when the concepts get more advanced.”

Put me in charge of Texas education, and I’d opt for a compromise: Set a time limit, but not a tight one.

Dr. Thompson says allowing three or four minutes per question should be plenty of time on a test such as TAKS. That works out to somewhere around three hours per test. (All but three of the 26 TAKS tests have between 36 and 58 real questions, plus a handful of other questions being tested for use on a future test.)

So set a limit of four or five hours, just to be safe.

If a child has a specific learning disability, his or her parents or teacher could request extra time, just as they can on the SAT or ACT. It’s not perfect, but it might make the TAKS death march a little less brutal – and give kids a reason to work at something other than a snail’s pace.

“The limits of physical endurance are not something that should be tested on these exams,” Mr. Paris said.

Joshua Benton covers primary and secondary schools for The Dallas Morning News. Thinking About Education, a column by the newspaper’s education staff, runs each Monday in the Metropolitan section.