Alabama's PACT Plan in Trouble- Officials Yet to Decide on New Plan

Most everyone knows that since September the Alabama Prepaid Affordable College Tuition Plan or PACT has been in serious trouble. With the stock market crash that reduced nearly half of the assets on the books, also came the the reduction of PACT assets to about half.

The PACT Plan was created in 1989 in order to save up money for Alabama high school Seniors to go to college at an in-state institution. Well, not so much anymore....

Technically, the state now owes twice as much in fund liabilities as they actually possess now in the fund. I'm not a parent, but if I was and I had been paying in money to the state for the last 15 years for my child to have enough later to go to college, I'd be a bit peeved right now.

My candidate, Tim James, had a relevant comment on the issue. He said it was "the most irresponsi­ble thing" for the board to put the largest portion of the investments in the stock market. I agree with that as well. The majority of the funds should have been in mutual funds. As Dave Ramsey says, "you should never have more than 10% of money in the stock market." And the reason is because of precisely what happened this past fall with the huge losses in the stock market. I'm not sure who was making the investment decisions for the PACT plan, but they probably need to be fired.

What is next is that a few officials, several of which are gubernatorial candidates in 2010, have gotten together to figure out where they will go from here.

Analysis: Tuition plan now big issue in Governor's race

As you can see, this group was to meet about 2 weeks ago on the 24th. Now, this committee isn't exactly a committee. It seems to be made up of a hodge-podge of officials and won't actually have any power to make a decision in this area. I planned on reserving judgement until later on whether or not they come up with something feasible. What is new today is that 3 members; Jim Folsom, Kay Ivey, and Bradley Byrne, those gubernatorial candidates I was mentioning, met with Gov. Riley today to make a few of their ideas known. I think I can stop waiting....

Read here:

Gov Riley says PACT solution workable

There's not a heck of a lot of material there to judge. The committee thinks they have a proposal to give to the Legislature before the session is over. They all seem to be on board with freezing tuition hikes for PACT students for a few years which I think is a good start, but there isn't much there that will make the 48,000 families happy. I hate to say it, but I think I agree with this Democrat:

Rep. Proposes rescue for Alabama Tuition plan

Now, I don't want to give the impression that I am for the Legislature writing a blank check to these students and I don't want to imply that I know all the ins and outs of Craig Ford's proposal, but the state made a promise to fund the college tuition for these students. Freezing the tuition hikes along with making sure the tuition is completely covered is what the plan should be.