Injustice of Alabama Prepaid Affordable College Tuition Program One injustice currently affecting my community, my family, and many other families throughout the state of Alabama is the Alabama Prepaid Affordable College Tuition Program (PACT). Instead of maintaining a “college fund” savings account at the bank or investing in stocks or bonds, many parents and grandparents “were sold on PACT and its assurance that they were paying tomorrow’s tuition costs with today’s dollars” (White, 3). So, they “decided to play it safe with guaranteed tuition for their children and grandchildren when they reached college age with a plan that was backed by the State of Alabama” (White, 3). Now, those parents and grandparents who had the foresight to plan ahead and secure the future education of their children and grandchildren by sacrificing to purchase PACT Plans are being told that education is in jeopardy and is no longer guaranteed (White, 1). The Prepaid Affordable College Tuition Program was originally started in 1990 when then State Treasurer George Wallace, Jr. and Lt. Governor Jim Folsom, Jr. sold the Legislature on the idea. (Rawls, 1). The two-decade old PACT program allowed families to prepay tuition by buying contracts when their children were young. (Rawls, 3). The state invested much of the money that parents paid into the program in stocks to generate enough money to cover the cost of four-year tuition at a state university by the time the child finished high school (Rawls, 3). This plan seemed to work well initially. Some 48,000 families invested in the program and in September of 2007 PACT funds stood at $899 million (White, 1). But, by September of 2008, PACT funds had dropped to $606 million and by March of 2009 PACT funds stood at just $484 million (White, 1). To put this loss into perspective, “Alabama’s prepaid college tuition program has lost more than 45 percent of its value in a year and a half – including 20 percent lost to the recent stock market collapse.” (White, 1). “The program began to falter when its stock investments plunged in value and tuition rose faster than anticipated.” (Rawls, 3). These catastrophic events prompted the State Treasurer to begin notifying PACT participants that the plan was in trouble (White, 1). My family is one of those 48,000 families who invested in the PACT Program. My parents purchased a PACT Plan for me in 1991 with a lump sum payment. During my interview with my parents, I learned that they were guaranteed that my in-state undergraduate college tuition at any of Alabama’s public two-year and four-year colleges would be paid when the time came, or if I chose to attend a private college or out-of-state public college then the plan would pay the average cost of in-state tuition (Bush). However, shortly before I graduated from high school, my parents were notified by letter that the PACT Plan had suffered financial losses and that they would be working with the state’s public colleges and universities to see what kind of agreements could be worked out. Initially, my parents were not very concerned because they had a contract guaranteed by the State of Alabama. Then, they began hearing rumors that the PACT Board had met and approved changes to the program’s benefits and that those benefits were no longer guaranteed. Not long after that, they began to hear news reports and read articles in the newspaper that PACT Plan participants were banning together to form a group called Save Alabama PACT. This group formed to fight for their legal rights under their contracts and some lawsuits have even been filed. Many options have been proposed. George Wallace, Jr. has announced that he is planning to run for State Treasurer “because he wants to help the state’s prepaid college tuition program make a financial comeback” (Rawls, 1). “Wallace said he wants to shore up the program without raising taxes on anyone by using money from several existing state sources. By doing that, he said, the participants will get college degrees, land higher paying jobs and pay more taxes to the state.” (Rawls, 2). The PACT Board met in December and approved the following changes: “Instead of paying the promised tuition benefits at any in-state Alabama public institution, PACT would limit fall 2010 benefits to the fall 2009 average rate at in-state schools, leaving students at the highest-cost public universities to pay more of the cost themselves. In each subsequent school year, benefits would not be tied to tuition increase but instead would be increased by 50% of the annualized total fund rate of return, if any, in the PACT program fund.” (“Alabama”). In addition, the PACT Board has proposed that if a participant receives a full scholarship that PACT will not pay any benefits and that the participant must request that their contract either be cancelled or transfer to someone else. (“Alabama”). However, “contract holders, lawmakers and candidates were unanimous last week in their rejection of the PACT Board’s recent decision to change the rules of the program, beginning this fall.” (Ricks, 2). Thus, a number of bills have been introduced in the current legislative session that deal with funding the financially troubled prepaid college tuition plan (Ricks 1). “State Representative Greg Wren said if the state does end up in a class action lawsuit over the PACT contracts, the state is going to lose. It’s a conclusion with which both U.S. Representative Artur Davis, a Democratic candidate for governor, and state Representative Robert Bentley, a Republican gubernatorial candidate, also have reached.” (Ricks, 1). Obviously, the PACT Program is in trouble and needs help. But, the 48,000 contract holders have every right to expect the state of Alabama to honor the contracts that they sold. The state of Alabama has a legal and moral obligation to those contract holders. There is no doubt that if contract holders had not kept their end of the bargain that action would have been taken against them. The parents and grandparents who planned ahead for the education of their children and grandchildren should not be punished because of poor investment choices that the state of Alabama made. One thing is certain; it is critical that all parties involved sit down together in a cooperative effort to find a long-term solution to the financial woes of the PACT Program.