PACT parents peeved at preservation plan

Patti Lambert bought Prepaid Affordable College Tuition plans for six of her grandchildren, believing them to be a solid investment in their future.

That’s why it’s no surprise that Lambert is not satisfied with a survival plan offered by the board of directors of the troubled program that would end the tradition of paying all tuition costs at public universities in the state.

“It’s horrible,” said Lambert, who lives in Decatur.

The Prepaid Affordable College Tuition plan began in 1991 with parents paying a fixed amount for a child with the expectation that when the child finished high school, the state would provide four years of tuition at a state university. About 45,000 Alabama students are currently enrolled in the plan.

The plan worked fine until tuition costs started rising faster than the board anticipated and the value of the plan’s investments plummeted to about half of the future tuition costs.

To fix the problem, the directors proposed paying a fixed amount for tuition, starting in fall 2010. 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.

Houston County Commission Chairman Mark Culver sent two of his children to college on the PACT plan and has an 11-year-old currently enrolled. Culver said he’s not happy with the proposed fix because it doesn’t live up to what the program promised when he bought into it.

“It was sold as you buy this program and it assures full tuition,” he said.

The directors’ plan will soon be submitted to a court for approval. Lambert said PACT contract holders may also resort to litigation if their contracts are not fulfilled.

State Sen. Harri Anne Smith, R-Slocomb, said the trustees moved prematurely in proposing the partial payment plan. Smith said the Legislature intends to take up the PACT issue, and that possible fixes to the program include cutting a deal with state universities regarding tuition, finding money from the general fund to cover shortfalls or a combination of the two.

“This is a big issue in this district,” she said. “I’m very committed to making this my number one issue in the legislative session.”

The Associated Press contributed to this story.