PACT quit taking new participants and the Legislature agreed to shore it up with $547.6 million in payments between 2015 and 2027. But PACT's board soon realized even that was not enough money to meet its obligations.
With PACT on the verge of collapsing, the board and most PACT families reached an agreement for PACT to continue, with tuition paid at fall 2010 rates instead of current rates. Some parents sued, but the Alabama Supreme Court upheld the reduced payments in April.
PACT has 33,224 participants, with 10,573 enrolled in college during the spring semester.
The board paid full tuition for the spring semester, but will pay fall 2010 rates for the summer term. Students attending in-state public colleges and universities will get whatever the schools' fall 2010 tuition rates were, and the students will have to make up the difference. Students attending private or out-of-state colleges will get $228.74 per credit hour and $144.45 in fees.
Sherman said the PACT board could end up with $85 million left in 2032, when the last student should finish his college eligibility. Boozer said the settlement gives the board the authority to increase payments above the fall 2010 level, and he hopes that can be done several years down the road. According to Sherman's estimates, the program will begin building a surplus in 2020.
That's a big turnaround from last fall, when he predicted its liabilities could exceed its assets by $605 million if it kept paying full tuition.