Injustice of Alabama Prepaid Affordable College Tuition Program
One injustice currently affecting my community, my family, and many other families throughout the state of Alabama is the Alabama Prepaid Affordable College Tuition Program (PACT). Instead of maintaining a “college fund” savings account at the bank or investing in stocks or bonds, many parents and grandparents “were sold on PACT and its assurance that they were paying tomorrow’s tuition costs with today’s dollars” (White, 3). So, they “decided to play it safe with guaranteed tuition for their children and grandchildren when they reached college age with a plan that was backed by the State of Alabama” (White, 3). Now, those parents and grandparents who had the foresight to plan ahead and secure the future education of their children and grandchildren by sacrificing to purchase PACT Plans are being told that education is in jeopardy and is no longer guaranteed (White, 1).
The Prepaid Affordable College Tuition Program was originally started in 1990 when then State Treasurer George Wallace, Jr. and Lt. Governor Jim Folsom, Jr. sold the Legislature on the idea. (Rawls, 1). The two-decade old PACT program allowed families to prepay tuition by buying contracts when their children were young. (Rawls, 3). The state invested much of the money that parents paid into the program in stocks to generate enough money to cover the cost of four-year tuition at a state university by the time the child finished high school (Rawls, 3). This plan seemed to work well initially. Some 48,000 families invested in the program and in September of 2007 PACT funds stood at $899 million (White, 1). But, by September of 2008, PACT funds had dropped to $606 million and by March of 2009 PACT funds stood at just $484 million (White, 1). To put this loss into perspective, “Alabama’s prepaid college tuition program has lost more than 45 percent of its value in a year and a half – including 20 percent lost to the recent stock...
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