By NEMS Daily Journal
The Mississippi Prepaid Affordable College Tuition Plan will remain in a state of suspended enrollment for at least a few more months while its staff and board decide what steps to take in erasing a $94 million funding liability, assuring that in moving forward the plan collects enough money from its client-investors to meet its obligations.
State Treasurer Lynn Fitch, who announced the enrollment suspension because of concern about the fund’s earnings and its obligations, met with board members and representatives of its actuarial auditors Tuesday to formally receive audit recommendations made by the Gabriel Roeder Smith & Co. firm.
No decisions were made Tuesday, but the recommendations include a higher price for investing in the tuition-guarantee plan because the rate of return on investment has not kept pace with projections, dealing with semester-hours costs and academic loads, and working with colleges about the frequency of tuition hikes.
The program has about 22,000 enrollees.
MPACT is calculated to require a 7.8 percent return to fully fund requirements, but the study said that rate is met or exceeded only 43 percent of the time. The average rate of return has been 4.8 percent. One recommendation would lower the anticipated rate of return.
Assistant state treasurer and departmental spokeswoman Sherri Hilton said no formal timeline has been set for reopening enrollment, but she said it is hoped a Jan. 1 date will be realistic. She noted that some legislators have suggested a Sept. 1 reopening to roughly coincide with the start of a new semester, but she said that is not likely.
The program – which includes thousands of students enrolled at the University of Mississippi and Mississippi State University, plus many others in community colleges in the region – must have new revenue to sustain itself or face the unwanted prospect of closure, paid against the full faith and credit of the state.
Ending the program is not a live option at this point, and it needn’t be if all the officials involved in its governance, plus the governor, lieutenant governor and legislators work collaboratively to place it on firm, long-term footing.
Some states have abandoned their tuition guarantee plans, but Mississippi has not reached that point if constructive, realistic decisions rule policy moving forward.