By Jeff Amy\Associated Press
JACKSON – Mississippi’s prepaid college tuition program will resume selling contracts Oct. 1, but with sharply higher prices.
The board that oversees the Mississippi Prepaid Affordable College Tuition program voted unanimously Wednesday to reopen the program, which allows participants to lock pricing for future two-year or four-year college expenses. State Treasurer Lynn Fitch closed the program in fall 2012, saying she was worried about a funding shortfall.
Some contract prices will be 60 percent to 90 percent higher than when last offered in 2011.
Fitch says new prices mean the program should avoid future shortfalls, and says it remains a valuable savings tool. Money from new contracts won’t be used to make up the previous program’s deficit, meaning the board is likely to ask lawmakers for state money to fill that hole.
PRESS RELEASE FROM TREASURER LYNN FITCH
Today, the Board of Directors for College Savings Mississippi unanimously voted to reopen the Mississippi Prepaid Affordable College Tuition (MPACT) program to new enrollment on October 1. The new plan will be offered with certain program adjustments aimed at preventing future funding shortfalls for new contracts.
Enrollment in the program was deferred by the Board in 2012 amid concerns that it could not be sustained long term. An independent actuarial audit of MPACT was ordered for the first time. It was aimed at evaluating whether the program was sustainable based on existing pricing, contract terms, and investment and expense assumptions. The pricing structure for new contracts has been analyzed by MPACT’s actuaries and was approved at today’s meeting.
“The Board considered program pricing, plan and payment recommendations very carefully before approving the new structure. The process has taken nearly two years, but it is time well spent,” said Treasurer Lynn Fitch. “MPACT is still a solid college savings tool for families yet these program changes will ensure that the program is cost-neutral for taxpayers.”
The new pricing takes into account future tuition increases, expected rates of return and program risk assumptions. The Board also streamlined certain plans and payment options to simplify the program.
“We know that families have been anxious to take advantage of the opportunity to lock in college tuition with MPACT,” Board member Len Blanton stated. “Now, we can give them that opportunity, and know that we did the right thing by taking these fiscally responsible steps.”
For information on MPACT program and pricing changes, go to www.treasurerlynnfitch.com.