The state Senate will consider a bill to move the troubled Maryland 529 college savings agency under the oversight of the state treasurer, Senate President Bill Ferguson said Friday.

The idea emerged publicly earlier this week, when State Treasurer Dereck Davis told the legislature he would support moving the agency under his office to address its problems.

“This is a really crucial program, and too many Marylanders have lost their faith in administration and operations, so I think moving it to the treasurer’s office is the right thing to do,” Ferguson said Friday at his weekly news conference.

Maryland 529 is an independent agency with no direct oversight by the executive branch of state government. Several state officials, including Davis and Comptroller Brooke Lierman, are ex officio members of its board.

The Baltimore-based Maryland 529 is named for the federal tax code section that allows parents to invest money tax-free for educational purposes.

It oversees about $1 billion in assets and offers two plans: the Maryland Prepaid College Trust and the College Investment Plan. The former, managed by Florida firm Intuition College Savings Solutions late 2021, allows parents to lock in tuition rates from the time they open an account; the state pays the difference in tuition increases. The latter is run similarly to a 401(k), is managed by Baltimore-based T. Rowe Price Group and has not reported any problems.

Parents who invested in the prepaid trust have accused the agency of suspending access to accrued interest earnings and backtracking on a contract agreement promising them a 6% compounded monthly interest rate on accounts opened before Nov. 1, 2021. They say that’s led them to lose tens of thousands of dollars in anticipated earnings and forced some to take on loans and turn to other means to pay their children’s tuition.

Agency staff said the problem stems from a calculation error that was discovered during the transition to Intuition as the program’s new program manager.

Lierman, who joined the 529 board after her January inauguration, has urged the agency to repay anxious families via the program’s $355.6 million surplus.

Ferguson said he appreciates Davis’ offer of “filling the void of the vacuum that existed in the leadership around 529,” and that there have been conversations regarding the appropriate agency to oversee the program moving forward.

“I don’t think we knew the depth of the challenge,” Ferguson said. “We know there has to be a significant change, and I’m glad that Treasurer Davis is willing to step into the gulf and take on what is going to be a big challenge of trying to fix a program that has lost its way.”

The Senate Education, Energy and the Environment Committee heard a bill Wednesday sponsored by Baltimore County Sen. Kathy Klausmeier, a Democrat, that would create a work group to propose policy solutions to correct the calculation error.

Now, Ferguson said that not only is a bill being drafted to move the program to the purview of the treasurer’s office, but officials have been considering whether it “makes sense” to continue offering the prepaid program.

“We are ... one of only 10 states that still had a prepaid plan in place,” he said. “Moving forward, I think we’re probably going to have to wind down that program because the other program that we have — the fund-managed 529 — is incredibly important.”

Senate Rules Committee Chair Joanne Benson, a Democrat from Prince George’s County, is poised to sponsor the forthcoming legislation.

Baltimore Sun reporter Lia Russell contributed to this article.