PACT not to pay all tuition costs

By Brent Maze (Contact) | Alex City Outlook

Published Tuesday, December 29, 2009

Parents who have enrolled their children in Alabama’s prepaid college tuition program will have to pay some of their tuition beginning next fall if they attend the most expensive universities.

The state’s PACT board decided in an early Tuesday morning meeting that it would not cover all tuition for participants in the program. Instead, the program will only cover a fixed amount of tuition starting in fall 2010.

The move has drawn ire from both legislators and participants in the program.

Save Alabama PACT co-founder Patti Lambert said the decision seemed designed to undercut efforts by the group to get the legislature to pass a bill next month guaranteeing tuition for the 45,000 participants.

“We’re extremely disappointed with this decision,” Lambert said. “They are changing the terms of the contract. We have legislators trying to work on a bill to help save PACT, but this decision is undermining our effort.”

Sen. Ted Little, D-Auburn, said Tuesday afternoon that he was surprised by the move.

“I was hoping both houses of the legislature would meet the board before a decision was made,” Little said. “When we went back into the legislature on Jan. 12, several were planning to introduce bills to help PACT and there will be some bills introduced into the legislature to try to help PACT. But this decision may not allow the legislature to help the program as much.”

The amount would be based on the average hourly rate that Alabama’s public universities are charging for the current school year.

In future years, the board could raise the payment amount annually based on the program’s earnings from investments rather than trying to keep pace with rising tuition costs. Its rough estimates are that payments would go up about 2.5 percent annually, while tuition would rise 7.5 percent.

Students choosing the three most expensive state universities – the University of Alabama, Auburn University and the University of Montevallo – would immediately have a financial gap between the plan’s payments and their tuition costs. Then as tuition grew in future years, students at other public universities would experience a gap.

The initial gap at Alabama and Auburn would be more than $500 per semester. For Montevallo, it would be $345 per semester.

Although the board passed the measure Tuesday, the Montgomery Circuit Court must approve the decision because it marks a change in the contracts that the state has with participants. It also requires a commitment from the Legislature to pump state money into the program – an estimated $236 million over the next two decades.

Lambert said Save Alabama PACT will be represented when the issue comes to the court and also on the first day of the legislative session on Jan. 12.

“We’re going to be represented there,” Lambert said. “We’re going to make sure that our contract is enforced.”

The Associated Press contributed to this report.

The state’s PACT board decided in an early Tuesday morning meeting that it would not cover all tuition for participants in the program. Instead, the program will only cover a fixed amount of tuition starting in fall 2010.

The move has drawn ire from both legislators and participants in the program.

Save Alabama PACT co-founder Patti Lambert said the decision seemed designed to undercut efforts by the group to get the legislature to pass a bill next month guaranteeing tuition for the 45,000 participants.

“We’re extremely disappointed with this decision,” Lambert said. “They are changing the terms of the contract. We have legislators trying to work on a bill to help save PACT, but this decision is undermining our effort.”

Sen. Ted Little, D-Auburn, said Tuesday afternoon that he was surprised by the move.

“I was hoping both houses of the legislature would meet the board before a decision was made,” Little said. “When we went back into the legislature on Jan. 12, several were planning to introduce bills to help PACT and there will be some bills introduced into the legislature to try to help PACT. But this decision may not allow the legislature to help the program as much.”

The amount would be based on the average hourly rate that Alabama’s public universities are charging for the current school year.

In future years, the board could raise the payment amount annually based on the program’s earnings from investments rather than trying to keep pace with rising tuition costs. Its rough estimates are that payments would go up about 2.5 percent annually, while tuition would rise 7.5 percent.

Students choosing the three most expensive state universities – the University of Alabama, Auburn University and the University of Montevallo – would immediately have a financial gap between the plan’s payments and their tuition costs. Then as tuition grew in future years, students at other public universities would experience a gap.

The initial gap at Alabama and Auburn would be more than $500 per semester. For Montevallo, it would be $345 per semester.

Although the board passed the measure Tuesday, the Montgomery Circuit Court must approve the decision because it marks a change in the contracts that the state has with participants. It also requires a commitment from the Legislature to pump state money into the program – an estimated $236 million over the next two decades.

Lambert said Save Alabama PACT will be represented when the issue comes to the court and also on the first day of the legislative session on Jan. 12.

“We’re going to be represented there,” Lambert said. “We’re going to make sure that our contract is enforced.”

The Associated Press contributed to this report.

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