Alabama PACT program in trouble
Lucy Berry
Issue date: 2/4/10 Section: News
The Alabama PACT (Prepaid Affordable College Tuition) program is gaining national attention as a $345 million deficit puts 45,000 PACT participants in jeopardy.
PACT was founded in 1990 when Lt. Gov. Jim Folsom Jr. and then-State Treasurer George Wallace Jr. formed a program that guaranteed college tuition to those who invested in prepaid tuition plans. As the economy worsened and the cost of tuition rose, PACT has lost more than 45 percent of its net worth.
"The state of Alabama has a legal, moral and ethical obligation to continue fulfilling PACT contracts," said Patti Lambert, co-founder and president of Save Alabama PACT.
In 1995, then-State Treasurer Lucy Baxley took the word "guarantee" out of all PACT promotional literature and contracts.
But, State Treasurer Kay Ivey, who took office in 2003, promoted PACT as a program that "will provide a child's undergraduate tuition and mandatory fees up to 135 semester hours at any Alabama public university or community college."
"There has been so much written about what is and isn't guaranteed," said Lambert. "It would be very difficult for an average citizen to ever suspect that the PACT contract was not what it said it was."
In August of 2009, the Retirement Systems of Alabama published a study that said PACT investments would be depleted by 2016 without a solution to the problem.
Last fall, 277 UNA students were enrolled in PACT but no students had been affected by the financial losses as of fall 2009, according to Dr. W. Steven Smith, vice president of Business and Financial Affairs.
"We will have to wait and see what happens before the UNA Board of Trustees will make a statement regarding PACT," said Smith.
The PACT board is working to approve a policy change that would cut more than $1000 from the investor's original contracts, which promised to cover full tuition and fees.
Save Alabama PACT members have rallied in Montgomery to oppose the new resolution and to raise awareness about the issues facing the PACT program.
"Our purpose is to unite in a single voice, and to protect the promise we were given when we purchased the prepaid contracts to furnish the college tuition of our loved ones," said Lambert.
Four class-action lawsuits have been filed against the State of Alabama, claiming breach of contract and negligence.
The House Education Appropriations Committee will meet on Feb. 3 in Montgomery to review a bill that could help repair the troubled PACT program.
PACT was founded in 1990 when Lt. Gov. Jim Folsom Jr. and then-State Treasurer George Wallace Jr. formed a program that guaranteed college tuition to those who invested in prepaid tuition plans. As the economy worsened and the cost of tuition rose, PACT has lost more than 45 percent of its net worth.
"The state of Alabama has a legal, moral and ethical obligation to continue fulfilling PACT contracts," said Patti Lambert, co-founder and president of Save Alabama PACT.
In 1995, then-State Treasurer Lucy Baxley took the word "guarantee" out of all PACT promotional literature and contracts.
But, State Treasurer Kay Ivey, who took office in 2003, promoted PACT as a program that "will provide a child's undergraduate tuition and mandatory fees up to 135 semester hours at any Alabama public university or community college."
"There has been so much written about what is and isn't guaranteed," said Lambert. "It would be very difficult for an average citizen to ever suspect that the PACT contract was not what it said it was."
In August of 2009, the Retirement Systems of Alabama published a study that said PACT investments would be depleted by 2016 without a solution to the problem.
Last fall, 277 UNA students were enrolled in PACT but no students had been affected by the financial losses as of fall 2009, according to Dr. W. Steven Smith, vice president of Business and Financial Affairs.
"We will have to wait and see what happens before the UNA Board of Trustees will make a statement regarding PACT," said Smith.
The PACT board is working to approve a policy change that would cut more than $1000 from the investor's original contracts, which promised to cover full tuition and fees.
Save Alabama PACT members have rallied in Montgomery to oppose the new resolution and to raise awareness about the issues facing the PACT program.
"Our purpose is to unite in a single voice, and to protect the promise we were given when we purchased the prepaid contracts to furnish the college tuition of our loved ones," said Lambert.
Four class-action lawsuits have been filed against the State of Alabama, claiming breach of contract and negligence.
The House Education Appropriations Committee will meet on Feb. 3 in Montgomery to review a bill that could help repair the troubled PACT program.
Viewing Comments 1 - 1 of 1
paper writing expert
posted 6/29/10 @ 9:53 AM CST
Thanks for awesome news - I like it!
Post a Comment