The College Savings Plan Board met Wednesday to discuss the status of the Mississippi Prepaid Affordable College Tuition (MPACT) program. The program was frozen more than a year ago and an audit was conducted.
"It was certainly a great opportunity 15 years ago but now as we've seen sustainability, recession, economic factors have caused some of them to close," said State Treasurer Lynn Fitch.
The board received good news from financial advisors and members of the audit team. The program gained $20 million from June of last year to June of this year.
Still, there's an $82 million deficit. That is an estimate based on re-opening the program. If it remained closed, the deficit would rise to $143 million.
"So, you're telling us we can't afford to keep it closed or re-open it?" Board member Cory Wilson asked the auditors.
They offered up a new idea of using money from unclaimed properties, to help close the deficit gap.
"I think we ought to look at that. I think that is the best idea I've heard about how to cover the deficit, how to dig us out of the hole," explained board member Dr. Eric Clark.
If re-opened, the cost for a new contract could go up by at least 20 percent. The concern for some board members then becomes, can you afford it?
"Many times that's what happens. You price it out so high that you don't have any participants.College costs more money now. Pricing for the plans would have to reflect that, " Fitch admitted.
The board voted to ask the auditing company for more details on how much they'd have to charge to avoid future deficits.
"A lot of this was baked into the cake, like I said. Some of the assumptions from the get-go lead us to where we are today," explained board member Cory Wilson.
Treasurer Lynn Fitch pushed for board members to remember there are other options out there. The state currently offers other plans that let families put away for college in smaller amounts, tax free.
"If you're trying to reach the children of Mississippi, we've got to look at ways like the 529 plan, the MACS plan that gives us the opportunity to really outreach," Fitch said.
The board plans to meet again next month to get a more detailed look at pricing options. For now, MPACT remains closed.
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