PORTLAND, Ore. (AP) — Treasurer-elect Ben Westlund is proposing a college savings plan that he says would be safer for parents than investing in the stock market.
Westlund, a Democrat, says he wants to start a prepaid college tuition program that would allow parents to lock into current tuition rates by paying into a savings account.
"We're not talking corporate bonds," Westlund told Oregon Public Broadcasting. "We're talking certificates of deposit, U.S. Treasuries."
Westlund says funds placed in the prepaid tuition program would be invested much more conservatively than the state's current college savings plan, which is effected by the rise and fall of the stock market. The state would also insure the money against loss in value.
Along with Senate President Peter Courtney, Westlund announced Friday the two men will take their proposal to the 2009 Legislature for approval.
"Education equals opportunity," Courtney said in a statement. "There is no greater investment parents can make than a college education for their children."
The Oregon College Savings Network suffered major losses in the stock market in 2008, prompting prompting House Speaker-elect Dave Hunt to call for hearings to look into the matter.
Parents who invested in some of the college savings plan's most conservative portfolios have lost thousands of dollars.
Under the plan proposed by Westlund and Courtney, the state would insure the money in the investors' savings accounts against loss in value. The tuition rates set under the prepaid college tuition program would be reflect costs at Oregon public universities, but the credits could be used at out-of-state schools. If an investor decided to withdraw the money, they would be charged a penalty.
The Legislature proposed a similar plan in 1998, but it was rejected Oregon voters.
A number of other states, including Washington, offer prepaid tuition plans.
"The plan not only saves parents money, but also creates a solid expectation that their child will attend college," Westlund said.
Westlund is scheduled to be sworn in as treasurer at Monday.