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Cost To Join MPACT Could Climb Dramatically

By Jeffrey Hess | Published 20 Nov 2013 05:10pm | comments
Actuaries Ken Alberts (left) and David Kausch

Mississippians might have to pay a lot more to enroll in the state's prepaid college tuition. MPB's Jeffrey Hess reports the fate of the Mississippi Prepaid Affordable College Tuition program could be decided as soon as next month..

The program, known as MPACT, has been closed to new enrollees since last year while the state examines its long term stability.

Yesterday, two actuaries told the Mississippi College Savings Board, which runs the program, that new enrolles could have to pay 20-to-30-percent more in order to close a roughly 80-million dollar short in the program.

Actuary Ken Alberts told the board that the state has two options.

"If you want to close the program, than our  recommendation would be start planning now to get another cash infusion somewhere in here and keep monitoring it. If you want to keep the program open, our recommendation would be to change the pricing of it so we don't fall further behind," Alberts said.

Leaving the program closed would actually raise the shortfall to over 140-million dollars and the cash would completely run out in 10 to 14 years.

The board is considering using money from the state's unclaimed property program to pay down the gap because many Board members, like Corey Wilson, want the program re-opened.

"And we have got to deal with it. We have got to honor the full faith and credit of the state. We have got to honor the plans for kids that are already in the program. Going forward, I have said before I would like it to reopen. And we want it to reopen as quickly as we can. But we have got to do that is a fiscally responsible way," Wilson said.

The shortfall is a result of bad investment performance and higher-than-projected tuition increases.

State treasurer Lynn Fitch says she wants the program open but doubts it could function as intended.

"They were certainly a great opportunity 15 years ago. But now, as we have seen recession and economic factors have caused so many of them to close. And certainly the nationwide trend is the 529 savings plans," Fitch said.

The board is expected to meet again next month to decide the future of MPACT.

Images

Actuaries Ken Alberts (left) and David Kausch


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