News - Education

Friday, Oct. 30, 2009

Tuition plans not hurt by economy

Funding is guaranteed by the state

The state’s tuition savings plans haven’t been hurt by the downturn in the economy, Treasurer Tate Reeves said this week.

Reeves said even if the economy would stay stagnant for the next 15 years, Mississippi would have enough money to cover the 30,000 people currently in the plan.

“We are not immune from what’s happening with the economy,” he said. “But we’re fortunate because we went into this very healthy. We went into the economic downturn with 95 percent funding.”

Mississippi has two programs for saving money for tuition. One is called MPACT and locks in the cost of tuition at the time people enroll in the plan. The other, MACS, is a savings program that invests money to be used for college expenses.

Reeves said there are nearly 30,000 people enrolled in both plans, but the majority of them signed up for MPACT.

“The reality is that we have over $200 million in our funds, and we are constantly getting new contracts,” he said. “So even if the economy didn’t improve for 15 or 20 years, we would have enough money through the early 2020s.”

He added that the plans dole out less than $15 million each year in tuition costs.

The plans are guaranteed by the state, he said, so even if the funds lose money because of the economy, the state would have to put up the money. However, he added that given the state’s strained budget situation, he hopes that doesn’t happen.

“It’s never been the intent that the state would have to appropriate money for the fund,” he said.

Other programs across the country have lost money due to the poor economy and rising tuition costs. Some states have been forced to increase fees, decrease benefits or close the programs to new applicants.

Reeves said he doesn’t see that happening in Mississippi. He believes this program encourages more students to go to college because parents save over time for the expenses and they lock in tuition prices.

“This is 25,000 kids in our state who might otherwise not go to college,” he said. “I spend a lot of time marketing this program because it gives me a chance to talk to kids about the importance of a college education.

“Affordability and accessibility are key issues.”