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Yesterday, the Texas House of Representatives passed House Bill 3900, the "Texas Tomorrow Fund II", by Representative Geanie Morrison (R-Victoria). The legislation creates new savings options to help Texas families pay for higher education.

"This proposal is an option that will benefit students, parents and our colleges and universities," Rep. Morrison said. "Under this plan, universities will be rewarded for making more judicious decisions regarding tuition and fees. This legislation will give Texas families more predictability about the cost of higher education while protecting the state from a shortfall."

Under Rep. Morrison's bill, families will be able to lock in today's rates for tuition and required fees for their children's future higher education needs, giving them more certainty about the cost of a college education. An investment in the Texas Tomorrow Fund II would be made by purchasing "units" each of which is worth one percent of one year’s tuition and required fees. There would be three types of units available for purchase, based on the highest priced public university, a weighted average at public universities, and a weighted average at junior colleges.

Once a child enters a university, the Texas Tomorrow Fund II would pay institutions the money initially invested in the child's account, plus any returns made on that investment. For example, 100 units of Type I units would be redeemable for 100 percent of one year’s tuition and fees. If the value of a participant’s units is less than the university's cost of tuition and required fees, the school is required to cover the difference in cost. However, if the value of the units is greater than the cost of tuition, the university retains the additional return on the investment. This works as an incentive for colleges and universities to keep tuition costs low.

"Since the shortfalls in the Texas Tomorrow Fund were revealed, Rep. Morrison has worked diligently to find alternatives to help Texas families pay for the rising cost of higher education," Speaker Tom Craddick (R - Midland). "This legislation will go a long way to ensure that more Texas children will be able receive a quality higher education."