Parents have uneasy feeling over PACT plan’s future
Published 5:45 pm Monday, March 9, 2009
The state treasury department and administrators of the PACT plan announced on the Web site www.800alapact.com that a public hearing would be held March 12 for participants to voice concerns to board members.
State Treasurer Kay Ivey sent out almost 49,000 letters last week informing participants the program had suffered significant losses in the stock market at a time when the cost of education is continually rising.
According to a press release, the program held assets of $899 million at the end of 2007. By January of this year that number had declined to $463 million.
Mike Orr of Pelham said the 48 percent loss worries him tremendously.
“Even if we can get the money back that we put in, we’ve lost,” Orr said. “You can get your money back, but that means it’s just been sitting there.”
Orr said he vividly remembers buying the PACT plan for his two children. Now he wonders whether or not his kids’ college tuition will actually be paid in full after participating in the program for more than a decade.
“A buddy at work hammered me about giving money to the state,” Orr said. “But I’ve busted my butt for the last 20 years working 12 to 14 hours a day. People say education is expensive but I’m telling people that not having one is even more expensive.”
Orr invested a total of $14,000 into the PACT plan about 15 years ago for his daughter and son.
His daughter Kaitlyn is currently a freshman at the University of Alabama, while his son Andrew just entered Pelham High School this year.
“We went into it with the hope that we would get four years of tuition paid for,” Orr said. “I was thinking, of course, that the cost of education was going to go up, and I figured this sounded like a good deal.”
So far, the state has paid for two semesters of college tuition for Kaitlyn. The next three years however are up in the air. Who knows what will be left for Andrew, Orr said.
The Prepaid Affordable College Tuition Plan was created in 1989 to allow parents to pay a set amount for tuition down the road.
State Treasurer Ivey has encouraged parents not to withdraw their money until after a board meeting March 24. Ivey said the program’s next step would be discussed then.
Concerned participants are encouraged to send comments to email@example.com.