PACT plan faces more problems

Posted by Samuel King - bio | email

MONTGOMERY, AL (WSFA) - A financial consultant projects that the state's prepaid tuition plan or PACT will run out of money to pay tuition costs in 2015, due to a projected shortfall of $269 million.  The consultant blamed major tuition increases for the shortfall and he also anticipates future tuition increases at the universities.

The PACT program may have to turn to the legislature for more help, even after a major bailout package was passed earlier this year.

"We can get a buffer from the state legislature or we can ask the legislature to take a strong stand on increased tuition," said Chris Shubird, a parent with three students on the plan.

The parents are hoping legislators and the heads of the universities can come together to come up with some sort of agreement on tuition increases, because getting more funding for PACT from the state legislature may be a tough sell.

"It's incredible to me with the economy today, children are expected to come up with such an increase in tuition," said Patti Lambert, the head of Save Alabama PACT.

Save Alabama PACT says a study to be released on Friday may offer a solution.

"If all the four year colleges were at five percent or capped at five percent, we would be 98 percent funded right now," Shubird said.  "I'm encouraged by that, but we still have a lot of work to do."

Shubird said despite the issues, the program is still able to meet its commitments right now.

"It's still a good investment.  I have three in college right now, and I don't know how we would have done that, I really don't."

The PACT board is asking the financial consultant to run the numbers again. The investments of the program are making money, but so far just not enough to deal with recent tuition hikes.

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