College savings aid available

Published 8:23 pm Friday, September 12, 2008

Many parents already begin to invest money for their children’s college education at an early age and the practice has become almost as commonplace as changing dirty diapers.

State treasurer Kay Ivey, who hopes to encourage more parents to start saving early, declared September “College Savings Month” on Monday.

“College tuition has skyrocketed in Alabama this fall, making it even more difficult for Alabama families to afford the cost of higher education,” Ivey said. “The proclamation of College Savings Month helps to bring attention to this important issue and reminds parents to start saving now.

“(The State Treasury) administers many programs designed to improve the quality of life for Alabamians,” she added. “The Alabama Prepaid Affordable College Tuition (PACT) program and the Alabama Higher Education 529 Fund offer savings and investment opportunities for families planning for future college expenses.”

Donna Cauley, guidance counselor at Andalusia High School, said the PACT program, which allows parents to make an affordable investment in their child’s future, is a great program for parents to get a jump start on college savings while their children are young.

“Every year that my children have been in college, the tuition has gone up,” she said. “With the PACT program you are locked into a tuition cost. Unfortunately I did not utilize the program for my two sons who are currently enrolled in college. It is wonderful. If there is any way parents can do that when their children are young, then it really benefits them in the long run.”

The PACT program offers a variety of payment plans, based on the child’s age, for parents to put away money to cover the cost of tuition in the future months. However the program does not cover the cost of books, room and board.

Cauley said that parents who have older children can still find alternate avenues to help alleviate the rising cost of a college education.

“The first step should be to fill out a Free Application for Federal Student Aid (FAFSA) to determine if the student may be eligible for any type of federal aid,” she said. “Through that, my children have received school loans. There are subsidized and unsubsidized loans. Subsidized loans mean you do not have to pay interest on the loan until after you graduate. Students must reapply for federal aid every year. There are a lot different areas you have to qualify and different types of money you can get. The money you receive is based on your family’s income and the year you are in school.”

Cauley said parents can also help their children become more college-minded by promoting the importance of good grades, standardized test scores and civic involvement to increase the likelihood of obtaining a scholarship.

“One thing I try to talk to my students about here is that scholarships are wonderful,” she said. “It starts in the ninth grade. When you hit the doors of high school, you have to automatically begin thinking scholarship. It is more than just good grades. It is also test scores, community involvement and volunteerism. You must have the total package. Many ninth graders are not mature enough to think of these things, but we work to help coach them in the right direction.”

Cauley said that students should also consider more than the standard four-year institutions.

“We are in a global economy and our students are competing with students from all across the world,” she said. “To be competitive you must have the proper education. We are not talking strictly four-year degrees. Most everyone needs some type of education in addition to high school. Students can attend a local two-year institution to obtain a technical degree for employment at an aviation institution or as a welder. There is a wealth of opportunities available to our students and there are several programs available to help parents provide that future for our students.”

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 and 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. Enrollment is open year-round. After the initial deposit of $250, additional contributions may be made anytime.

The PACT four-year contract covers in-state public tuition for up to 128 semester hours, or the equivalent at institutions that use a quarter or other academic term basis. PACT will also pay qualified fees for eight semesters, or the equivalent number for colleges and universities on another academic term basis. The PACT one-year contract covers in-state public tuition for up to 32 semester hours, or the equivalent at institutions on a quarter or other academic term basis. PACT will also pay qualified fees for two semesters, or the equivalent number for colleges and universities on another academic term basis.

For more information about the PACT program or the Higher Education 529 Fund, visit For more information about the Free Application For Federal Student Aid visit