Board votes to save PACT program
Alabama’s ailing prepaid college tuition program will continue to provide financial assistance to those who have invested in the program, but chose to freeze enrollment.
The board that oversees the Prepaid Affordable College Tuition Plan voted unanimously to save the program on Tuesday.
Still, the program may still face financial hardship without help from the Legislature to help out in harsh economic times.
The board voted to pursue a bill in the Legislature to allocate as much as $45 million a year to help with the program to help with its shrinking assets, which are now less than half the money it needs to pay future tuition obligations.
Local legislators say they were both for doing something to help aid the program.
Still, Sen. Wendell Mitchell (D-Luverne) wasn’t sure getting money out of the general fund is the answer.
“I’m for doing something for the PACT program, but I don’t know the general fund is the place to find that money,” Mitchell said. “The general fund doesn’t have any money.”
Mitchell stressed that state aid for the program would have to be analyzed carefully and see if the state is in a position to help.
“I think it’s something we’re going to have to analyze and see if we’re in a position to help with,” Mitchell said.
Rep. Alan Boothe (D-Troy) told The Messenger he supports allotting funds to PACT.
“I would support anything that would help that PACT program within reason,” Boothe said.
PACT currently has more than 48,000 participants, who range from newborns to current college students, with nearly 12,000 students attending college under the plan at this time.
State Treasurer Kay Ivey, who serves as chairman of the PACT board said the program definitely has enough money to pay summer school tuition.
But tuition for fall 2009 could be in the hands of the state legislature and the PACT board has only 17 days to get the legislature to decide to help before the session ends May 18.
Some 200 or more parents and grandparents who have invested in the PACT program flocked to the meeting Tuesday.
Lt. Gov. Jim Folsom Jr., who sits on the board, told program participants, “this program is going to survive, and we are going to fix this problem in the Legislature.”
The program, which invests mostly in the stock market, has been hit hard by the ailing economy.
Over the past few years, the program has seen its assets drop from $899 million on Sept. 30, 2007 to $431 million on Feb. 28.
In order to meet future obligations to participants currently enrolled, the program needs $481 million in additional funds.
As for other solutions to the ailing PACT program, Troy University has already offered to waive tuition increases for PACT students.
The University has offered to allow PACT students to pay the current years’ tuition price for the next three years, despite the increases the school may incur.
“As educators in Alabama, we need to pursue a solution based upon that concern for students and those who subscribed to the program.” Troy University Chancellor Jack Hawkins said.
*The Associated Press contributed to this article.