Save Alabama PACT, the grass-roots organization that is fighting to bail out the state’s prepaid college tuition program, is planning to endorse political candidates. The group could be a significant force in state politics. The organization, which didn’t even exist a year ago, has tapped a motivated base of about 43,000 PACT contract holders in the state. When parents and grandparents bought PACT contracts, they did so with the belief that their investment was guaranteed to pay for four years of college. But now, with the state warning that the cash-strapped program may fall far short of being able to live up to its obligations, those families are demanding solutions from the Legislature. Senator Ted Little, a Democrat from Lee County, is leading the efforts in the Senate to save the PACT program for contract holders. Rep. Craig Ford, D-Gadsden, sponsored a PACT bailout bill in the House, which has passed and is now over in the Senate.
The prepaid tuition program run by the state treasurer’s office offered parents a chance to lock in then-current tuition rates for students who might not enroll for 18 years. But the program’s assets were far more heavily invested in stocks than most comparable programs, which was a risky approach. According to the program’s most recent actuarial report, it is on pace to run out of money in five years, but has sold contracts requiring it to make tuition payments through 2032. An analysis by the Retirement Systems of Alabama indicates the program needs an infusion of $1 billion over ten years to meet all of its long-term obligations. Senator Little and Rep. Ford, with the help of other legislators, may be able to get something done.
In any event, Save Alabama PACT may wind up being a force in this year’s elections. Patti Lambert, a co-founder of Save Alabama PACT, said the organization plans to post endorsements on its Web site. She says they have established contact with most of the contract holders who live in Alabama. The group is surprisingly diverse, according to Ms. Lambert, including blue-collar and white-collar Alabamians. She says folks from all walks of life are among the membership. A survey of contract holders conducted by the group found that 43% of respondents indicated they work in education. Also, we must all remember that it wasn’t our colleges and universities that caused the PACT problems at the outset, and that fact may have gotten lost in the shuffle.
Source: Birmingham News
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