Parents look for solution for PACT program shortfall

Published 4:19 pm Tuesday, August 25, 2009

A study presented last week by Buck Consultants gave Gov. Bob Riley four potential options for saving the state’s Prepaid College Tuition Program.

The Save Alabama PACT group plans to meet Thursday at Dawson Memorial Baptist Church Thursday, Aug. 27 to learn more about progress being made.

Birmingham division leader Karen Gaddy said the group wanted to bring information to the parents.

“Its just not convenient for everyone across the state to meet in Montgomery,” Gandy said. “It will make sure everyone is informed. There are some folks who, for whatever reason, have not kept up to speed with what has been going on.”

What’s going on is that a consulting group has recommended four options to Gov. Bob Riley.

The first, suggests making a one–time lump payment of $641.8 million. This is the least expensive option, but would require a new funding resource. The second would have the state pay–as–it–goes and could cost upwards of $1 billion. The third option would provide $100 million supplements each year over seven years and the fourth would require the state to appropriate level amounts of funding each year until the last beneficiary completed school.

The report claims the final option would be the most realistic approach for the state. Rep. Mike Hill of Columbiana thinks a special session is needed to hammer out a plan.

“We’ve got no choice. We’ve got to make sure those people are looked after; I don’t care what it costs,” Hill said. “If we bring this up during a special session then there would be no excuses for not solving the problem. No one could say, ‘Oh, well we had to pass this or we had to pass that.’”

Hill said parents need to keep themselves informed in the meantime and keep pressure on their respective legislators to come up with a solution.

“We want to encourage people to keep in touch with their legislators and let them know how important it is for future of our students for these contracts to be honored,” Gandy said.

The program saw held assets of $899 million at the end of 2007. By January of this year that number had declined to $463 million. According to the study, more than 1,600 contract holders withdrew their plans after the announcement in March.