News in Brief

Ala. Moves to Save Program for Prepaid College Tuition

Article Tools
  • PrintPrinter-Friendly
  • EmailEmail Article
  • ReprintReprints
  • CommentsComments

The Alabama legislature reached a compromise last week aimed at shoring up the state’s prepaid-college-tuition plan with nearly $548 million over the next 17 years and keeping the state’s promise to pay tuition for 44,000 students.

Some legislators complained that the compromise puts a financial pinch on regional universities while exempting the University of Alabama system and Auburn University. But the state Senate voted for it 23-8, and the House voted 85-7.

Alabama's Prepaid Affordable College Tuition, or PACT, plan began in 1990 with a promise to parents or grandparents that if they paid in a fixed amount for a child, the child would later receive four years of tuition at a state university upon graduation from high school. A state board invested the money and used the earnings to pay the tuition. That plan worked until the stock market plunged in fall 2008 and tuition started rising faster the PACT board had anticipated. By last year, the programs assets were about half the amount necessary to meet its future tuition obligations for 44,000 students.

Vol. 29, Issue 30, Page 5

Published in Print: April 28, 2010, as Ala. Moves to Save Program for Prepaid College Tuition
Related Stories
Notice: We recently upgraded our comments. (Learn more here.) If you are logged in as a subscriber or registered user and already have a Display Name on, you can post comments. If you do not already have a Display Name, please create one here.
Ground Rules for Posting
We encourage lively debate, but please be respectful of others. Profanity and personal attacks are prohibited. By commenting, you are agreeing to abide by our user agreement.
All comments are public.

Back to Top Back to Top

Most Popular Stories