MOST ATTRACTS SAVINGS ACCOUNTS FOR COLLEGE TUITION

The skyrocketing cost of college tuition is a subject that weights heavily on the minds of many parents. With the price of higher education far outpacing inflation, preparing to meet the financial demands of tuition expenses places an increasing burden on working families.

However, a new program run by the state treasurer's office is providing Missouri families with a new option. Established by legislation passed in 1998, the Missouri Savings for Tuition program, or MO$T, allows parents to set up tax-deductible savings accounts earmarked for college tuition.

Individuals can put $8,000 a year into a child's account, or $16,000 for joint filers. The accounts grow free from state and federal taxes. When the money is withdrawn, taxes are paid by the student, typically at a low rate.

From the time the program was implemented in November through last week, more than 6,000 accounts had been established with assets in excess of $18 million. More than 100 new accounts are set up each week.

The company that manages the accounts touts the Missouri program as one of the most successful it has been involved with, thanks in large part to the generous tax breaks.

It's hard to find a downside to MO$T. Missourians at any income level can establish tuition savings accounts. In cases where a child dies, becomes disabled or earns a scholarship, the money can be withdrawn free of penalties after one year. If a child decides not to attend college, the funds can be shifted to another child's account without penalty.

Also, the accounts aren't just for parents planning for their children's future. Adults, both those seeking advanced degrees and those attending college for the first time, can establish accounts for themselves.

Although pleased with the response to MO$T, state officials hope even more families sign up. Information can be found by calling 1-888-414-MOST or on the Internet at www.missourimost.org.

Providing tax breaks to help offset the tuition costs is a positive and innovative approach for Missouri, and the college-bound and their parents would do well to take advantage of the program.