From Virginia to Ohio to Texas and beyond, a growing number of public universities are seeking to redefine their relationships with their state governments and the taxpayers who historically have supplied billions of dollars to support the universities.
The development is raising potential new problems for already troubled prepaid tuition programs, which have been set up in many states to allow families to lock in today's tuitions for when their kids reach college.
The revisions are driven by the collision between steadily rising operating costs at the colleges and increasingly strapped legislatures that have found university support an easy target for budget cuts.
As many of these schools see it, state assistance has declined so much over the years that it is no longer worth the restrictions that accompany it, including curbs on tuition increases.
The schools' approaches differ somewhat, but in most cases freedom to raise tuition, especially on at least some in-state students, seems to be a key goal. For example, Miami University in Ohio has adopted a private-school-like pricing model: It nominally charges a high tuition, then offsets it in many cases with extensive discounting in the form of student aid.
Miami and others say this model gives them the flexibility they need to compete with private colleges. Miami officials said it has allowed them to boost aid for moderate-income in-state students who were being priced out by increases that had occurred under the old model.
In other cases, schools are boosting tuition and using the extra money to sweeten aid packages for top applicants who would otherwise attend private or out-of-state institutions.
These approaches are controversial for a number of reasons, and they are making it very difficult for their states' prepaid tuition programs to continue.
These programs typically allow a family to buy a contract that promises to pay all or a specific share of a child's tuition at a state college in the future. The programs assume that their money managers can invest the family's contract payments and use the growing balance to keep up with tuition. But the programs have been struggling in recent years as tuition has suddenly shot ahead and investment returns have sagged.
Most prepaid programs are grounded in the assumption that in-state tuition will be at least somewhat restrained and will be the same for all in-state students. Conversion to a "soak the rich, help the poor" pricing model for in-state kids would create new headaches for these programs because their contractual promise could put them on the hook for the full "sticker price."
This confluence of events has caused a number of programs across the country to stop selling contracts. Ohio and Texas are among a half-dozen states that have closed their programs to new applicants.
"It's because of a lot of factors. Miami was one of the latest ones," said Jacqueline T. Williams, executive director of the Ohio Tuition Trust Authority. She added that tuition is soaring at other public colleges in Ohio, climbing 50 percent at the state's four-year universities since 2001.
Williams and other program heads hasten to assure families who have bought contracts that those agreements will be fulfilled.
In Virginia, the University of Virginia, William & Mary and Virginia Tech are all seeking "charter" status, which would decouple them from the state. What impact this would have on tuition isn't known yet, but program head Diana F. Cantor said her office has been busy assuring contract holders that they will still be covered if the three universities are given charter status.
In fact, "anyone who is in a plan today, or who signs up by January 31, will have the full benefit" of the program as it exists today. "If they go to a state school, charter or not, the program will cover all tuition and fees."
Prepaid plans typically have annual enrollment periods when they accept new participants. Virginia's is on now and runs until Jan. 31. Maryland's opens tomorrow and runs until March 18. The District does not have a prepaid plan.
But Cantor said she is concerned about whether the program will be able to open to new participants after this year's enrollment period ends. The program now has a deficit of roughly $128 million, and though that is down sharply from a year ago, state lawmakers may decide the fiscal strain is too great.
She said she thinks prepaid programs remain feasible, though tiered pricing, which a few states have adopted, may become more common. In those programs, contracts are priced differently for different schools within the state.
That structure would make prepaid plans less appealing, however. Already many families are reluctant to commit themselves to state systems, for fear their children might opt for private or out-of-state schools. Programs do pay something if that happens, but the value of the guarantee is lost.
The programs that have remained open have also had to impose sharp price increases on families that buy contracts, which typically can be purchased for a lump sum or in installments. Joan Marshall, executive director of Maryland's program, noted that prices are up 10.3 percent for the coming enrollment, but that is an improvement on the past two years, when it hiked prices 25 percent each year,
This has made college savings programs, such as Coverdell accounts and 529 plans, more attractive to many. However, while these programs have important tax benefits, they do not guarantee that the account will cover college costs. Maryland, Virginia and the District all offer 529 plans.
States are struggling to find ways to make their prepaid plans more affordable. Families in Maryland will be able to buy a contract for as little as one semester at a university or one year at a community college, half the previous minimums. And those who pay over time will have more years to do so.
This hardly solves families' college-cost problems, but Marshall noted that "it lowers the price point people can get in at. . . . They can get a foot in the door to get started" and perhaps buy more later.
The problems of prepaid tuition plans are of interest beyond the world of college attendance. If these plans can't make it, college tuition will join pensions and other societal needs in the march away from professional management and into the hands of everyday Americans.
The Bush administration sees a new "ownership society," in which we save and invest to finance these things ourselves as the way to go, but it's not clear why amateurs like us will succeed where the pros didn't.
"Phased retirement" is a concept that has been getting lots of attention recently as a way of helping boost employees' retirement income while easing problems employers may face if large numbers of experienced workers depart at once.
A problem arises, though, for workers who would like to try part-active, part-retired arrangements: If they go to part time, their pay drops, but under current rules, they can't start drawing their pensions because they are working.
Last week the Internal Revenue Service proposed new regulations that would allow employees age 591/2 or older to begin drawing a pro-rata share of their pension if they take part in a formal, voluntary, phased-retirement program through their employer.
The new rules would apply only to traditional "defined benefit" pensions and a certain kind of defined contribution plan called a money-purchase plan. Retirement arrangements such as 401(k)s and 403(b)s are not affected. However, most of those types of plans have less restrictive rules anyway.
The new rules do not become effective until they are issued as final, probably by next spring.