Lawmakers Eyeing Prepaid-Tuition Plans Anew

When her husband died suddenly five years ago, Sally Gilliland, a Bradenton, Fla., mother of two, says she spent no time worrying about covering her college-bound sons' education on a nurse's salary.

That's because, in 1988, the Gillilands were among the first families to enroll in Florida's Prepaid College Program, a "pay now, learn later" approach to college financing that allows parents to lock in their children's future college-tuition bills at current prices by paying into a state-run investment program. State financiers invest the early tuition payments, and proceeds from those investments cover subsequent tuition increases at state colleges and universities.

Ms. Gilliland says her family's purchase of college "contracts" through the Florida program covered most education expenses for her sons, Pat, now 20, and Sean, 22, who today attend the University...