JACKSON, Miss. (AP) — A state board voted unanimously Monday to reopen enrollment this fall in the Mississippi Prepaid Affordable College Tuition program.
The state-backed plan allows participants to lock in current tuition levels as they save for future two-year or four-year college expenses. It had been closed to new enrollees since fall 2012 because of concerns first-term state Treasurer Lynn Fitch raised about a funding shortfall.
The board in 2012 ordered an independent group to audit the plan's finances while enrollment was closed. Actuaries said that, in the past, the board had not set aside enough money to cover unforeseen bad events, such as downturns in financial markets.
"The audit's recommendations will take time to be implemented prudently, but the board's decision allows MPACT to remain an option for families in planning for a college education, in a fiscally responsible way," said Fitch, a Republican, in a news release Monday.
When the board voted to reopen enrollment, members agreed new contracts "must be priced appropriately" and not add to the shortfall, Fitch said. Although contracts are likely to be more expensive than they were previously, there have been several previous increases in contract prices since the program first opened in the 1990s.
The program is about $82 million short of what it needs to meet all its long-term obligations. If new enrollment was closed permanently, the treasurer's office said, the shortfall would rise to $142 million. Fitch said reopening enrollment will reduce the shortfall but not erase it.
She said any changes in future contracts won't affect 21,000 current contract holders.
Lt. Gov. Tate Reeves, a Republican, was state treasurer from January 2008 until January 2012. He said in an interview Monday that it's normal for investments held by the college savings fund to fluctuate, based on the performance of financial markets.
"I really don't think that the state will ever have to put money into the prepaid tuition plan," Reeves said.
He said he doesn't believe that college tuition will continue to increase at the pace actuaries have expected.
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