MPACT program to reopen - MSNewsNow.com - Jackson, MS

MPACT program to reopen

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JACKSON, MS (Mississippi News Now) -

 

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There's a green light to get cash flowing back into the state's college savings program known as MPACT. 

To put some perspective on saving, consider this: by the time your child is in third grade, they're halfway to college.

"This is an option that certainly gives them a better rate because if you're locking in tuition now and you may not have a child going to college for 17-18 years, it's a phenomenal investment," explained Treasurer Lynn Fitch.

Board members have poured over data and audit information about MPACT's future for 18 months.

"It's important because we've had a lot of people sitting on the sidelines waiting for us to do so or waiting for us to make a decision," said board member Len Blanton.

That decision came Monday, in the form of unanimous vote to reopen MPACT this fall.

Treasurer Fitch said, "we now have to stop again, reevaluate, get new rules, processes and regulations."

College costs more money now. It didn't look like the state could afford to keep the program going when it was frozen to new participants in 2012.

"We have a shortfall on existing participants," described Blanton. "That shortfall was because our pricing, basically because our pricing did not match what the ultimate payout was. So we will have to re-price it."

The shortfall is about $82 million for current participants. If the program had stayed closed, it would've gone up to $142 million.

Still, the prices of new contracts are expected to go up.

"If you're going to factor in down the road as tuition increases we'll certainly have to be very cognisant of that," said Fitch. "In order to be in line, we'll have to reevaluate how we make those prices work in line with those contracts."

None of the changes will impact current contract holders. Their investments are guaranteed by the state.

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