Alabama PACT Board of Directors Approves Increase for Benefit Payments
FOR IMMEDIATE RELEASE
MAY 23, 2023
Contact in Treasurer’s Office:
MONTGOMERY – State Treasurer and PACT Board Chair, Young Boozer, announced that directors of the Alabama Prepaid Affordable College Tuition (“PACT”) Program approved an increase to the current rate paid by the PACT Program for tuition and fees at its board meeting held May 23, 2023. This marks the ninth consecutive increase in benefits since the Class Action Settlement Agreement was approved and will be effective fall semester 2023.
Under the 2011 Class Action Settlement Agreement, PACT was required to pay tuition and qualified fees at the fall 2010 rates as certified by each respective Alabama public eligible educational institution. The agreement was negotiated to allow for an increase in benefit payments if the actuarial condition of the PACT program improved. In all cases, the PACT Program pays the lesser of the school’s tuition and mandatory fees or the 2010 tuition rates as adjusted annually by the Board.
Most four-year Alabama schools are currently receiving the full cost of tuition and mandatory fees due to the increases granted by the Board over the past years. All two-year Alabama schools currently receive full tuition and mandatory fees from the PACT Program. It is anticipated that, given the adjustment rate approved for academic year 2023-2024, all two and four year Alabama schools will be paid full tuition by the Program.
“We are pleased to be able to provide another increase in benefit payments for the upcoming academic year. The $177.3 million prepayment by the Legislature in 2022 along with the Program’s adherence to the 2011 Settlement Agreement have positioned PACT extremely well for the remainder of the Program,” said Treasurer Boozer.
The PACT Program originally sold 76,251 contracts dating back to 1990 and currently has 6,960 active contracts.