Maryland parents thought the state was helping them save for college. Then some of the money vanished.
Maryland parents who invested in state-backed, prepaid college savings plans were thrilled when plan administrators told them two summers ago the fund was flush with cash, and they would all share in the riches. They expected the news meant more money would be available to send their children to college, an opportunity whose costs keep climbing.
But in the 18 months since that celebrated announcement, Maryland 529, the state agency that oversees the Maryland Prepaid College Trust, distributed, and then took back, the money — tens of thousands of dollars in some cases — sending many parents into a confused rage. Marylanders and District of Columbia residents hold nearly 30,000 of these accounts, and roughly one in 10 are for students enrolled in college this academic year.
Maryland 529 officials have blamed the inflated balances on a calculation error and said they’re working to correct it. Parents and college finance experts interviewed by The Baltimore Banner see things differently. They say the state may have violated the terms of a 2021 contract with account holders that promised generous earnings and believe the state could be compelled to pay up to make accountholders whole.
Dozens of parents demanding relief are set to testify about the problem this afternoon in Annapolis, and the Maryland 529 board is scheduled to meet Thursday.
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