103 NORTH MAIN STREET  °  BEL AIR, MARYLAND 21014  °  410.838.9340  °  FAX: 410.838.9330

NEWS RELEASE

FOR IMMEDIATE RELEASE
JAN. 27, 1998
CONTACT:  G. Harrison
                       410.838.9340, 410.803.2780

BEL AIR--Harford County Executive Eileen Rehrmann today charged Governor Parris Glendening with running self serving and misleading television and radio ads promoting a state higher education investment program which is not yet developed or in operation.

          Rehrmann said the ads violate the state statute which created the program.  She called on the governor to immediately withdraw the ads and reimburse the taxpayers for the cost.

          "There is no investment product ready in the marketplace, yet the first priority of the program was to use taxpayer money to put your face on prime time TV and your voice on drive-time radio," Rehrmann said in a letter to the governor.  "Your ads make investment promises to parents which cannot be guaranteed...promises which are prohibited by law."

          The program in question was created by the 1997 Maryland legislature to encourage savings for college.   The Maryland program encourages parents to invest at levels designed to pay estimated future tuition costs, but the program is prohibited by law from guaranteeing investment returns or locking in tuition levels.  The law specifically requires all program advertising to fully state that investment in the program doesn't guarantee the investment program will earn enough to pay tuition when the child reaches college age.

          Rehrmann pointed out that parents who invest in the program may well have to pay additional tuition depending upon how fast education costs increase and how well the investment fund performs.  If fund performance is low in the next decade, or higher education costs escalate beyond projections, parents will have to pay the difference.

          "The ads falsely state that 'you can lock in today's prices'," Rehrmann said.  "The new law and program will not affect tuition prices at all."

          The law states that any marketing efforts undertaken by the Maryland Higher Education Investment Program Board "must include full disclosure that the contract entered into under the provision of this Act does not guarantee that the earnings of the assets invested in the program will generate the difference between the projected costs of tuition under the contract the actual costs at the time of enrollment."

          Rehrmann said "it is clear the legislature wanted to make sure the public was not misled into believing the current tuition costs were locked in by enrolling in the program.  The Governor's own words in the television and radio commercials counter this intent."

          In the ads, Marylanders are told to "invest today" and they are given a toll-free number to call for more information.  But there is no more information.  Callers to 1-888-4-MD-GRAD are told that "no information is ready" and the "the legislature is in session and working on this."  In fact, the legislature enacted the program authorization nine months age.

          "Your telemarketers should stop misleading Marylanders about the status of this program." Rehrmann said.

          Rehrmann also asked the governor to explain why he found it necessary to hurry these ads onto the airwaves.   "The only urgency was the urgent needs of your re-election campaign," Rehrmann charged.  "Your used taxpayer money for a massive media campaign and advertised a program which doesn't yet exist."

     Rehrmann demanded the governor immediately withdraw the misleading ads from the marketplace and reimburse the taxpayers for the cost of these ads.

Authority: James E. Haupt III, Treasurer