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College savings program proposed
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Posted on Feb 15 2001
House leaders are mulling over the creation of an organized mechanism that would financially prepare local students to pursue their postsecondary education careers within the Northern Marianas.
Dubbed as the Commonwealth College Savings Program of 2001, the legislation’s intent is to establish a qualified higher education tuition program to enable families save for college and other expenses through college accounts.
Rep. William S. Torres, author of college savings bill, has proposed for the implementation of college accounts that would enable residents of the CNMI and other states to benefit from the tax incentive provided for qualified state tuition programs under the Internal Revenue Code of 1986.
The House initiative is also targeted to attract students to public and private colleges and universities within the CNMI.
Under the proposed legislation, the Secretary of Finance shall implement the program in accordance with the terms and conditions established by the act, through the use of financial organizations as account depositories and managers.
The account depositories and managers will be selected from among bidding financial organizations that demonstrate the most advantageous combination, both to potential program participants and the CNMI.
In selecting the qualified institutions, the finance secretary must take into account the financial stability and integrity of the financial organization, the safety of the investment instrument being offered, the ability of the investment instrument to track the expected increasing costs of higher education, and the ability of the financial organization to satisfy record-keeping and reporting requirements.
Other criteria also include the financial organization’s plan for promoting the program and the resources it is willing to allocate to promote the program, the fees, if any, proposed to be charged to persons for opening accounts, and the minimum initial deposit and minimum contributions that the financial organization will require.
Transactions conducted between the finance secretary and the financial organization selected will be done by means of a management contract. (MM)
