PACT program should be honored
Published 10:04 pm Saturday, March 21, 2009
Alabama’s prepaid college tuition program is in a fine mess, and we don’t see an easy solution.
The PACT program, which was supposed to be a sound investment for parents, grandparents and aunts and uncles who wanted to prepay college tuition for students, has lost more than half its value since 2007, primarily due to the stock market losses. Now, the PACT program cannot meet its obligations. Participants are irate –some are even suing – and lawmakers are considering pulling money from the state’s anemic general fund to offset the losses in the PACT program.
That’s simply robbing Peter to pay Paul.
The state’s general fund, which must pay for everything from state troopers to Medicaid and state prisons, already falls far short of meeting its obligations. Diverting $30 million a year for the next five years, which is one proposal, would simply worsen the problems. And, sadly, there is no guarantee that the end of those five years the value of the PACT program will have increased. If not, the state will still be seeking a permanent solution.
Sadly, it’s a real quandary. Innocent and trusting Alabamians invested in the PACT program believing that they were making a smart investment in their children’s future educations. They either didn’t understand, or weren’t clearly told, about the potential risks involved.
And now, thousands of students’ fates hang in the balance.
Lawmakers and elected officials have a weighty challenge ahead as they seek to rectify the problem. We don’t foresee any easy answer, but we do believe something needs to be done … Whether in-state colleges can prorate their tuition charges for PACT participants or funds are funneled into the program from a variety of sources. The state needs to honor its commitment with the PACT program.