Parent to college savings plan board: ‘This is not a technical error’

An unofficial spokesman for account holders of Maryland 529, the state’s troubled college tuition payment fund, told the agency board Monday that its recent explanation about problems with the program to the Maryland General Assembly fell short of being completely accurate.

Brian Savoie, one of more than 30,000 account holders in the Maryland Prepaid College Trust, told the board that errors in their account balances were not merely an “earnings calculation issue,” as described to lawmakers, but the result of a board-approved policy change in June 2021 to pay additional “earnings” to accounts and then a subsequent reversal.

“While you assert that parents didn’t understand what we purchased, we most certainly understood, and understand, the contracts we signed,” Savoie said. “Do you expect the legislature and the governor to believe that more than 700 of us could be that significantly confused in exactly the same way?”

Contrary to what Maryland 529 officials have said, Savoie told the board in a three-minute presentation, “this is not a technical error.”

The public portion of the board meeting Monday lasted just 21 minutes before members voted to close the session under provisions of the Maryland Open Meetings Act. Members did not comment on Savoie’s presentation and assertions, which echoed what he has said before, including before legislative committees.

The problems with the Maryland Prepaid College Trust stem from a board decision by in June 2021 to give account holders a sort of bonus on money they had set aside for future college tuition — “earnings” that were previously unavailable to participants in the trust plan.

Maryland 529 officials believed the “earnings” could be paid to account holders as part of a “simplified calculation,” but the computations were far more complicated.

Some account holders’ balances jumped significantly as a result of the change and the calculation, causing many to believe that the sudden increase would allow them to send their children to private and more expensive out-of-state schools. Some account-holders committed to the more expensive colleges, only to then be informed by Maryland 529 last summer that a glitch in what apparently is a complex calculation might very well have inflated their account balances.

The Prepaid College Trust is one of two programs overseen by Maryland 529, which is named for a section of the federal tax code dealing with tax-deferred savings for college tuitions. The second state-backed savings program, the College Investment Plan, is administered by an outside money manager, T. Rowe Price, and is unaffected by the accounting errors, officials have said.

Monday’s meeting of the 529 board was chaired by Geoffrey F. Newman. He stepped into the role of acting chairman earlier this month after the former board chair, Peter Tsirigotis, abruptly submitted his resignation after a tense House briefing.

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