Alabama AP Survey: No consensus in Legislature on bailout for prepaid tuition plan

Alabama AP Survey: No consensus on tuition bailout

MONTGOMERY, Ala. — An Associated Press survey of Alabama legislators found there is no consensus yet on whether state government should bail out Alabama’s financially ailing prepaid college tuition plan with millions of state dollars.

Republican Rep. Greg Wren of Montgomery and others have prepared legislation that would commit state government to paying the tuition for 45,000 students remaining in the Prepaid Affordable College Tuition plan.

In the AP survey, 59 percent of those responding in the House and 38 percent in the Senate expressed support. The proposal was opposed by 5 percent of those responding in the House and 21 percent in the Senate. The remaining 36 percent of the House and 41 percent of the Senate were undecided.

To pass, Wren’s bill will have to pick up many of the undecided votes in the Senate.

Patti Lambert of Decatur, co-founder of the Save Alabama PACT organization, wants Wren’s bill passed and realizes there is work to do. She said members plan to rally on the Statehouse steps Tuesday when the Legislature convenes for its annual session.

“We’ve got to fight for it. Our power is in our elected power,” she said.

Alabama’s PACT program began in 1991, with parents paying a fixed amount to the state government in anticipation that after graduation from high school, their child would receive four years of tuition at a state university. A state board invested the money to get the income to pay tuition.

That worked until tuition started rising faster than expected, and investments plunged in value, leaving the program without enough money to meet its future obligations. The board overseeing the PACT program froze enrollment and made plans to pay only a fixed amount toward tuition in 2010.

Wren said the Legislature needs to “protect the promise” made to parents by passing a bill that commits the state to paying full tuition. He also has separate legislation to change management of the program, but it doesn’t specify where to get bailout money.

Wren said committing the state to fund the contracts would negate lawsuits filed by parents and would save millions of dollars in legal fees to defend a case the state will likely lose. With the lawsuits out of the way, he predicts legislators can find a financial solution faster.

Keeping PACT’s promise could cost $450 million to $1 billion, depending on how the investments perform and how fast tuition rises over the next two decades.

Sen. Linda Coleman, D-Birmingham, said she feels sorry for parents who invested money, but the state’s financial hardships make a rescue unlikely.

“We don’t have a source of money to do it,” she said.

Senate budget committee Chairman Roger Bedford, D-Russellville, said legislators are looking at possible revenue sources, but haven’t found one yet.

“I hope we will honor the contracts. I feel they are valid contracts between the PACT board and recipients,” he said.

Sen. Charles Bishop, D-Jasper, said it’s impossible to predict how the PACT problem will play out, but it’s clear the Legislature shouldn’t have created the program two decades ago.

“The whole thing was a bad idea to begin with,” he said.