By Bobby Harrison
Daily Journal Jackson Bureau
JACKSON – The Mississippi Prepaid Affordable College Tuition Program, closed since the fall of 2012 because of a funding shortfall, will reopen this fall.
The College Savings Plan Board, chaired by state Treasurer Lynn Fitch, decided Monday to reopen the beleaguered MPACT program.
“The board’s decision allows MPACT to remain an option for families in planning for a college education in a fiscally responsible way,” Fitch said.
Fitch said the cost to buy into MPACT will rise, and consumer options will be streamlined. The board will decide the specifics of those changes before the fall enrollment starts.
MPACT, created in 1997 by the Legislature, allows parents and grandparents to pay current tuition levels for their children’s and grandchildren’s higher education in later years.
Even after the board increases costs, Fitch said she believes the program will be a good option for parents looking to plan for a child’s higher education.
The board, which also includes Higher Education Commissioner Hank Bounds and state Community College Board Executive Director Eric Clark, opted to shut down enrollment in 2012 and hire outside consultants to assess the program’s financial viability. Currently, the plan is funded at 80 percent and is $82 million short of the money needed to pay the approximately 22,000 participants.
Increasing the costs to enroll will not solve the shortfall, Fitch said Monday. She said that is an issue to be decided at some point by the Legislature since the participants in the program are protected by the “full faith and credit of the state of Mississippi.” In other words, if there is not enough money in the plan to pay tuition costs for enrollees, the state is responsible for making up the difference.
Lt. Gov. Tate Reeves, who served as treasurer from 2004-2012, praised the board’s decision to re-open the program. He also said he believes it is possible that any financial deficiencies in the program will be worked out over the long run.
He said part of the current problem was caused by the dramatic drop in the stock market in 2008, negatively impacting MPACT’s investment earnings, as well as larger-than-anticipated increases in college tuition. He said the stock market fluctuates, but he believes college tuition costs can’t continue to increase at the levels they have in recent years.
“I am glad the board made the decision to take a look at the long-term viability and made the decision to reopen,” said Reeves, adding that making it easier for Mississippians to have more educational opportunities should be a priority.
In a news release from Fitch’s office, Gov. Phil Bryant also praised the decision to re-open MPACT. “Mississippi must continue to build an outstanding workforce, and a college education is an important component of the career path for many students,” Bryant said.
Mississippi is one of only four states remaining with programs that guarantee the college tuition will be paid to all enrollees regardless of the funds in the program. Many states shut down similar programs in recent years.
But the study done for the board determined that shutting down MPACT actually would increase costs to the state because new money would not be flowing into the program.