PACT ‘going fine,’ state treasurer says
Published 5:34 pm Tuesday, September 8, 2009
CALERA – The Alabama Prepaid Affordable College Tuition program could operate with its current funds until 2014, Alabama Treasurer Kay Ivey told the Calera Chamber of Commerce Tuesday.
PACT, which allows state residents to finance their children’s college tuition over the course of several years before their child enters higher education, recently has faced much uncertainty as state legislators have been struggling to ensure the program’s funding.
“The fact is, the market just damaged every investment company there is,” Ivey told the group. “The market just hit everyone. An RSA (Retirement Systems of Alabama) study showed there was not mismanagement of funds or anything like that.”
As more and more Alabama students become eligible for the program, state officials are struggling to ensure PACT can meet its financial obligations to those who have paid into the system, Ivey explained.
“The truth is that a high number of students are eligible for it, and that number is going to keep going up,” Ivey, whose office manages the program, said. “We need more cash flow to keep up with the increased demand.
“We need to have a temporary infusion of cash to keep the program going, into the future,” Ivey added. “If the state legislature does nothing, the program’s current assets can survive long enough to pay for students through Aug. 2014.”
The program could face more uncertainty in the future, as it and many other investment entities are closely tied to the national economic climate, she said.
“The program is going fine now unless the market goes down further,” Ivey said. “I just want you to know the facts. No surprises.
“There is no guarantee that the legislature will do anything about the program,” the treasurer added. “Everyone just needs to stay close to their House and Senate member and let them know what you are feeling.”