(MONTGOMERY, Ala.) (AP) May 20 - The board of Alabama's prepaid college tuition program agreed Wednesday to keep paying tuition for the upcoming school year while it seeks a bailout from the Legislature that will take care of 48,000 participants.The board of the Prepaid Affordable College Tuition Plan voted unanimously Wednesday to assure parents that they have nothing to worry about for the summer, fall and spring semesters.
"PACT has the money for 2009-2010 and a few years beyond that, if the market doesn't go down," the board's chair, State Treasurer Kay Ivey, told about 100 parents after the board meeting.
"That's what we needed to hear," said Lanett veterinarian Richard Huckaby, whose daughter starts at Troy University in the fall on the tuition program.
But he said there are no assurances beyond spring 2010 unless the Legislature can be persuaded to provide funding when it meets again in January.
"Our work is just beginning," said Huckaby, co-founder of the parents' group Save Our PACT.
The state-sponsored tuition program allowed parents or grandparents to pay fixed amounts when children were small. Then when the children graduated high school, they expected four years of paid tuition at a state university. The program's board invested the money to cover the tuition costs.
That worked fine for nearly two decades until the stock market plunged and tuition rose by double-digit percentages.
Alabama's program saw its assets drop from $899 million in September 2007 to about $460 million currently. The program's actuary said Wednesday it needs another $460 million to cover future tuition obligations for all participants.
Decatur real estate agent Patti Lambert, who paid for six of her grandchildren to be in the program, said participants want to avoid having the program close and refund money because that wouldn't come close to paying tuition.
Several other states' tuition programs have experienced similar programs. Some have frozen enrollment like Alabama, and some have provided state funding.
The Alabama Legislature ended its 2009 session Friday without offering a financial bailout, but it did ask the state pension fund to conduct a detailed study of the program.
The tuition plan's board agreed to maintain the status quo while that study is done and while the Legislature meets next year.
"That gives time for the Legislature to construct a solution," said Lt. Gov. Jim Folsom Jr., a founder of the program and a current board member.
Marc Reynolds, deputy director of the Retirement Systems of Alabama, said most legislators want to save the program, but nobody agrees on where to find the money during tight economic times.
"All we need is money, and that's where we start butting heads," he said.
Not everyone is willing to wait on a legislative solution. The program's records show that after Ivey notified participants of the financial problems, 1,170 people canceled their contracts in March and April and got refunds.
(Copyright 2009 by The Associated Press. All Rights Reserved.)
