South Carolina's tuition prepayment program has a big funding shortfall -- $63.8 million. But it's a little premature for the state to throw up its hands and close the program to new participants.

At least 16 states have figured out how to make tuition prepayment programs work. Why not South Carolina?

Through the program, families pay in advance for a child's college tuition. They lock in today's rates. More than 6,400 parents and others have put their money into the $124 million program. That money is invested by the state to pay for future tuition.

The problem: The program's obligations now exceed what the state is expected to earn on investment. The shortfall, through 2028, is $63.8 million. Under current assumptions, the program will go broke in 10 years.

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Tuition hikes have created the projected shortfall. Tuition has been rising by double-digit percentages. The program had assumed annual tuition increases of only 9 percent.

Gov. Mark Sanford has proposed a $41 million bailout of the program in addition to closing it to new participants. Sanford's plan has the support of some key state leaders, including new state Treasurer Thomas Ravenel, who oversees the program.

Certainly, the state's first obligation should be to ensure promises are kept to current participants in the program. But it seems extreme to completely close the program to new participants.

Two things could help the program recover: higher investment returns than the expected 7.25 percent annual gain, and more modest tuition increases in South Carolina.

The Legislature can help achieve that second goal. The Legislature's underfunding of our colleges and universities is a major reason that those institutions have been forced to raise tuition in recent years.

The Legislature did a better job of providing money to universities last year and colleges raised tuition by 6.7 percent -- well under the 9 percent assumed by the tuition prepayment program. That sort of modest tuition increase is key to maintaining the solvency of the tuition prepayment program.

The tuition prepayment program, which began only in 1999, is experiencing a problem common to many younger prepayment programs. Older programs, such as the one in Florida, have had more time to build a fiscal cushion.

The prepayment program's situation is not hopeless. It can be saved without closing it to new participants. If state leaders do close it, at the very least they should consider re-opening it in the future if the financial picture improves. A tuition prepayment program clearly is beneficial -- encouraging families to save for college and helping to ensure a well-educated work force in South Carolina.

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