A program approved by the Legislature this week and now awaiting Gov. Don Siegelman's signature is good news for the parents who want to invest money to pay their children's college costs.
College is expensive.
Alabama has had for several years prepaid tuition programs in which there are now some 52,000 children enrolled. It allowed parents to invest in a fund that would generate the money to pay college tuition and fees. The Alabama College Education Savings Program, which compliments the prepaid tuition program, allows parents to invest an unlimited amount in a mutual fund from which money can later be drawn to cover a child's college expenses, including room and board and incidental costs. For parents, the program is a good deal for several other reasons. The investment earnings would be exempt from state taxes and will likely be exempt from federal taxes, if a bill now before Congress, is approved.