Although higher tuition costs have increased the cost to enroll in Alabama's Prepaid Affordable College Tuition Plan, state treasurer Kay Ivey said the program remains a good deal.
According to current PACT contract pricing, it would cost slightly more than $21,000, payable in a single lump sum to enroll a newborn today. That is about 445 percent higher than 1990, when an infant less than a year old could be enrolled for $3,857.
College Board estimates show tuition at four-year public schools has climbed about 130 percent since 1990. It has increased at a faster rate in recent years because of inflation and state funding cutbacks at colleges. Ivey said PACT's enrollment pricing is based on estimates of future tuition costs and projected rates of return. PACT's model assumes its investments will earn nine percent a year while tuition will increase seven-point-five percent.
The plan allows people to invest as little as $25 a month.