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Families enrolled in a popular college savings plan will face additional delays in accessing their funds, the official in charge of Maryland鈥檚 鈥�529鈥� programs said on Thursday.
Anthony Savia, the head of the Maryland Prepaid College Trust and the College Investment Plan, said his team has made 鈥渟ignificant progress鈥� in its efforts to fix an error in how interest for trust account holders is calculated. But he declined to commit to a 鈥渄ate certain鈥� for resolving the issue completely.
鈥淲e are committed to doing this right and fixing an ongoing problem,鈥� he said. Savia, who took the reins of the program over the summer, spoke during a virtual 鈥渢own hall鈥� meeting at which he provided an update on efforts to set accounts straight.
Savia said accounts are being corrected manually while the plan works to fix the electronic calculation of participants鈥� benefits, a process that is expected to conclude in October. 鈥淭he first step in that process is determining which accounts require immediate attention,鈥� he said. 鈥淲e will try to prioritize the most urgent cases.鈥�
The program is working with outside consultants on a 鈥渓ongterm strategy to address the data translation issues.鈥�
For months, parents have been unable to tap all of the funds that have accrued in the trust. Plan officials said they froze the interest portion of families鈥� funds because they encountered 鈥渁n issue鈥� as they transitioned from one vendor to another.
Although the issue surfaced late last year, parents complain they were only made aware of it this year. Some have been unable to pay fall tuition because of the problem.
A program spokesperson declined to say on Thursday how many account holders have been impacted by the botched handoff.
During the 45-minute meeting, a staffer relayed questions that parents submitted electronically but they were not allowed to speak or ask follow-ups.
Savia said the 529 board is considering 鈥渕ultiple options鈥� to correct the calculation errors. 鈥淭he goal is to ensure all benefits are calculated accurately鈥� so that no one receives more than they should and no one receives less than they should.鈥�
One unidentified family complained they had to take out a loan, at 14% interest, to pay fall-semester tuition. In an interview, Treasurer Dereck E. Davis (D) said there needs to be a 鈥渃onversation鈥� about whether such families should be compensated.
鈥淭hat is something that needs to be discussed,鈥� he said. 鈥淚鈥檓 not sure how viable an option that is, but at a minimum some conversation needs to take place.鈥� Davis said he was speaking as state treasurer, not as a member of the 529 board.
A handful of members are appointed to the 529 board by the governor; the rest serve by virtue of the positions they hold in state government.
Brian Savoie, a Montgomery County parent who started a Facebook page called 鈥淔ree Our Interest NOW, Maryland 529!,鈥� said the town hall provided 鈥渧ery few direct answers.鈥�
鈥淭ransparency is not Maryland529鈥檚 strong suit,鈥� he wrote in an email. 鈥淭hey didn鈥檛 answer all submitted questions despite ending the call early. We are starting to gather a list of unanswered questions to present to the executive director.鈥�
Savia, stressed that the funds are not at risk. Rather, he said, officials are working to resolve an interest calculation problem. 鈥淭he funds in the Prepaid College Trust are secure,鈥� he said. 鈥淭he issue does not impact money held in trust 鈥� the earnings or the funds held for the benefit for the public. This is not a situation where funds are missing.鈥�
Maryland offers two 529 college savings programs (named for the section of IRS code that makes them possible). The trust allows parents to lock in their child鈥檚 future tuition costs when they are young. The other, the College Investment Plan, is administered by an outside money manager and functions similar to a 401(k). That investment plan is unaffected by the software glitch, officials insist.
Families impacted by the glitch can contact the plan at聽mpctassistance.md529@maryland.gov.聽The Maryland 529 Program homepage makes no mention of the ongoing interest-calculation issues, though there is聽聽that attempts to provide resources.
