Prepaid Tuition Fund Hits Rough Times

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A prepaid college tuition fund may have to bar new investors and strictly limit benefits available to existing members.

Officials say the state investment program designed to help residents pay tuition has been hurt by stock market losses and high tuition increases.

The state's deputy treasurer Ben Stein says if those trends continue, the fund may not be able to honor all its contracts. More than 7,800 people have invested $62 million in the fund. They have been given a Feb. 20 deadline to decide whether they want to remain in the program.

After the 20th investors face a cumulative 5.5% annual cap on tuition increases. The program was designed to provide protection against rising tuition by locking in rates.