Alabama prepaid college tuition plan not bound by an explicit guarantee

[dkf]

State fears investors will pull money out of PACT
Tuition fund has lost 46 % of its value in 1½ years
Saturday, March 07, 2009
STAN DIEL
News staff writer

The state on Friday urged parents and grandparents who bought into Alabama's troubled prepaid college tuition plan not to withdraw their investments, a move that could start a run and further drain it of funds.

Officials also said the state is not bound by an explicit guarantee in thousands of the program's early contracts promising participants that their tuition would be paid.

The Alabama Prepaid Affordable College Tuition trust fund has lost 46 percent of its value in a year and a half, including 20 percent during the recent stock market crash. The trust fund, with assets invested mostly in stocks, was worth nearly $900 million in 2007, and now is worth about $484 million.

http://www.al.com/news/birminghamnews/statebriefs.ssf?/base/news/1236417339209360.xml&coll=2

http://havealittletalk.wordpress.com/2009/03/11/my-pacts-and-their-fictions/

[JVS]

1. If the state doesn't want people to pull out, they should start making some guarantees.

[BlooInBloo]

2. Saw that from Atrios earlier today. Very shitty.

[dkf]

5. Yeah that is where I read it.

His posts are hilarious...if you don't click it, you have no idea WTH is going on.

[MADem]

3. Not bound by an explicit guarantee? Might as well take the dough and go to Vegas, then.

What utter horseshit. Way to live up to the stereotype, too!

[lonestarnot]

4. What another ponzi?

[bamademo]

6. That's one reason a push for a lottery has come up again.

We're bordered by states that have lotteries/casinos. More lottery tickets are bought by N. Alabama residents then they are from the local population. We almost had one when Siegelman was Guv but it was defeated by dark dealings from Mississippi and Alabama Southern Baptists.