From Treasurer Ivey
S-A-V-E: Sock Away for a Valuable Education
By State Treasurer Kay Ivey
Parents and grandparents across Alabama dream of one day being able to send their children to college. I’m proud to tell you the State of Alabama offers two college savings programs that can help make that dream a reality – the Prepaid Affordable College Tuition (PACT) Program and the Alabama Higher Education 529 Fund.
Through the PACT Program, a contract can be purchased to prepay either 128 semester hours of college tuition and 8 semesters of qualified fee payments or 32 semester hours of tuition and 2 semesters of qualified fee payments at any Alabama public college or university. PACT may also be used at private or out-of-state institutions. Flexible plans are available to pay for the contract that is priced according to the age of the child. The 2007 PACT open enrollment period will begin in October and continue through the end of December.
The Alabama Higher Education 529 Fund allows individuals to participate in an investing program, managed by Van Kampen Investments, in which they may select from a number of professionally crafted investment strategies. The beneficiary of the account may be a child, adult or even the individual, himself. Withdrawals from the account can be used to pay for tuition, fees, books, room and board at any accredited college, trade or graduate school. There is a direct-sold investment option available for Alabama residents that allow them to avoid upfront commissions and costs as well as the state administrative fee.
Both programs feature tax advantages and flexibility in allowing benefits to be transferred to other members of the family. Certainly, individuals may invest in one or both programs and may choose the option that best meets their financial situation.
I encourage all parents and grandparents to S-A-V-E: Sock Away for a Valuable Education. To learn more about these programs, please call 1-800-252-7228 or log on to the Treasury website, www.treasury.alabama.gov, and click on “college savings”.
Remember, it’s more than an investment in your child’s college – it’s an investment in their dreams. And yours, too!
