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Maryland 529 board chair resigns amid scrutiny over college savings plan

Some parents say they’ve been unable to access all of the money in their Maryland Prepaid College Trust accounts

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Maryland 529 board chair Peter Tsirigotis turned in his resignation Friday, one day after facing withering criticism from state lawmakers for the agency’s handling of problems with one of Maryland’s college savings plans.

Tsirigotis, who did not immediately respond to requests for comment, appeared before the Maryland House Appropriations Committee on Thursday to explain why hundreds of families have been unable to access all of the money in their Maryland Prepaid College Trust accounts.

Md. lawmakers grill college saving plan administrators over problems

“As a parent of college-age children, I can relate to and share the frustrations expressed by the account holders,” Tsirigotis told lawmakers. “We are focused on resolving the issues for the account holders as swiftly as possible. However, we realize in retrospect that more could have been done to provide account holders with updated information.”

While Tsirigotis was very apologetic for the inconvenience to account holders, lawmakers were visibly frustrated with the lack of a firm deadline to fully resolve the error that left some families scrambling to pay tuition this academic year.

“It’s disgraceful,” House Appropriations Committee Chair Ben Barnes (D-Prince George’s) told Maryland 529 administrators Thursday. “This legislature is really looking at your governance and thinking maybe we need some big changes here.”

Maryland lawmakers plan hearings on troubled state college savings plan

Before the legislature could take action, Tsirigotis bowed out on his own. He had served on the board since late 2017 and was named its chair last year.

In a statement, Michelle Winner, a spokeswoman for Maryland 529, thanked Tsirigotis “for his dedication and service as the Maryland 529 Board Chair.” She said Vice Chairman Geoffrey Newman will serve as the interim chair until a new chair is elected at the Feb. 23 board meeting.

Hundreds of people with prepaid accounts have been affected by a calculation error that led Maryland 529, the agency charged with managing the state’s college savings plans, to suspend interest payments in August. The error stemmed from a technical problem in applying a new accrual rate that the board approved in November 2021 for balances held before Oct. 31, 2021, according to the agency.

Once the change was applied, some accounts that were ineligible for the increase were shown as receiving it, officials said. After discovering the error, Maryland 529 suspended interest payments until they could be corrected. It hired third-party accountants to verify the calculations and the coding of software.

‘A broken promise’: Maryland college savings plan blocks parents from withdrawing money

Anthony Savia, executive director of the Maryland Prepaid College Trust and the College Investment Plan, told lawmakers Thursday that resolving the problem has taken longer than anticipated, but “quality control measures have been put in place to ensure accurate reporting moving forward.”

He said tuition benefits are not frozen and account holders have access to their principal contributions. But many parents say the money is not enough to cover their costs and has forced them to take out loans or tap retirement accounts with tax penalties.

Brian Savoie, a Silver Spring parent, testified about his ordeal covering his son’s tuition at Purdue University this year, saying he received only a portion of the $9,000 he was expecting from the trust for the semester.

On Friday, he expressed disappointment that Tsirigotis resigned before the matter was resolved.

“While there is certainly plenty of fault and blame to go around, the vacancy of the chair position at this critical juncture is concerning to say the least,” Savoie said Friday. “Yesterday, Peter Tsirigotis and I agreed to begin discussions. I call on the interim chair, the executive director, and the entire Maryland 529 board to honor that and begin discussions on a resolution immediately.”

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