Senator Eliot Shapleigh - El Paso, Texas

AUSTIN — The state's once-touted guaranteed college tuition plan, the Texas Tomorrow Fund, could be more than $3 billion in the hole as it winds down two decades from now, according to the state comptroller.

Since the state is obligated to keep its end of the bargain, lawmakers would have to make up any shortfall from state general revenues.

Comptroller Susan Combs, in a letter dated Feb. 15, told Texas' state leadership that a group of unpaid financial professionals foresees a far grimmer financial fate for the fund in the year 2029 than previously expected.

"While no one can accurately predict the future performance of the plan with absolute certainty, I believe these estimates are sobering," Combs wrote in the letter, obtained by the Houston Chronicle and San Antonio Express-News.

Previously the plan estimated it could be $683 million short of meeting its obligations by 2029, Combs noted in a letter to Gov. Rick Perry, Lt. Gov. David Dewhurst and Speaker Tom Craddick.

"The advisory group reviewed the variables used in that estimate, and believes the assumptions do not represent a likely outcome," Combs wrote. "Based on their analysis, they believe that the plan will more likely be short somewhere between $1.74 billion and $3.31 billion by 2029."

The fund, which began in 1996, was advertised as a boon to Texas' middle-class families. About 158,000 families took advantage of the plan until it "temporarily" discontinued enrollment after the Texas Legislature deregulated college tuition in 2003.

Since then, state college tuition has soared an average 60 percent. State officials, however, have assured parents who invested in the fund that the state is obligated to honor its end of the contract.

Under the plan, parents could lock into current college tuition rates while their children were young. The state would then use interest earned from the plan to pay the rising cost of tuition by the time a child entered college.

"For some time, I have been concerned about the financial status of the Texas Guaranteed Tuition Plan," Combs wrote, noting she chairs the Texas Prepaid Higher Education Tuition Board, which administers the fund. "Upon taking office, in January, I immediately asked a group of experts outside state government to review the plan and provide me with an analysis."

Combs' predecessor, Carole Keeton Strayhorn, could not be reached for comment.

John Sharp, who conceived the idea for the fund when he was state comptroller, said he'd "never heard anything even remotely close" to the multi-billion-dollar shortfall.

"Something smells funny," he said. "It sounds like somebody's trying to kill the fund."

Sharp, a Democrat, said the problem is that the state stopped accepting enrollees.

"Any fund like that depends on new folks coming into the system, just like Social Security," he said. "Right after I left office, they killed the Tomorrow Fund. When you do that, it's a travesty for middle-class families."

Billy Hamilton, who was deputy comptroller until just a few months ago, noted that the Sunset Advisory Commission recently reviewed the fund and recommended that it be opened again for enrollment, with some changes such as a premium price for students hoping to attend the University of Texas and Texas A&M University.