Bailout Deal for Alabama College Savings Plan

April 23, 2010

The Alabama Legislature reached a deal Thursday that will keep the state's prepaid tuition program functioning, the Associated Press reported. With the 2008 collapse of stock values, the funds invested by the state on parents' behalf no longer appear sufficient to pay the tuition of those who paid to join the plan. Some in the state have worried that the bailout would amount to a large infusion of funds to a program that largely benefits the middle class or wealthy who participate at a time that colleges that primarily serve low-income students are short on funds. In the end, the deal will provide $548 million over 17 years to maintain the program. And in a move that is being criticized, the deal requires public universities to limit tuition increases for program participants, but exempts Auburn University and the University of Alabama systems.

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