MONTGOMERY, Ala. (AP) - The financial problems in Alabama's prepaid college tuition program have become the first controversy in the 2010 race for governor.
State Treasurer Kay Ivey, who administers the program, and Lt. Gov. Jim Folsom Jr., who serves on the tuition plan's board, are considering running for governor in 2010.
The two candidates who have already announced for governor are criticizing how the state tuition program lost nearly half of its assets.
U.S. Rep. Artur Davis says it is an example of state government failing to manage the citizens' money wisely.
Greenville businessman Tim James says the board took irresponsible risks with parents' money.
James is running for governor as a Republican and Davis is running as a Democrat.
Ivey says it's wrong for politicians to exploit the situation. She says this is no time for petty politics.
IVEY: DON'T PULL FUNDING
Ivey is urging parents not to pull their money out of Alabama's prepaid college tuition plan before its board meets March 24. That's when the board will consider its options for coping with plunging assets.
Ivey said Friday that parents who pull out of the program could face tax consequences because of the tax breaks that come with participation in the program.
The Prepaid Affordable College Tuition Plan has nearly 49,000 participants, with about 12,000 of them currently in college. The program's assets have plunged by 45 percent since September 2007 due to the downturn in the economy. Liabilities now far exceed assets.
Ivey said the plan's board will hold a hearing March 12 in Montgomery to gather parents' comments about what should be done.