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MPACT Impacted By Economy

Mississippi Prepaid Affordable College Tuition Plan undergoes audit.

The Mississippi Prepaid Affordable College Tuition (MPACT) Plan is currently undergoing an actuarial audit. Enrollment for 2012 has been deferred temporarily, according to the program’s website.
The board of the MPACT program has suspended new enrollments until the audit is complete.
“They have frozen it for Mississippi because there is some concern on investments and the rate of return,” said Laura Diven-Brown, director of financial aid at The University of Mississippi. “It’s under financial review to make sure it’s stable.”
What does this mean for MPACT buyers?
“They are still honoring plans for people like me that have one,” Diven-Brown said. “Those of us who invested early are hoping that our investments are still going to be protected, (given) the fact that the state of Mississippi is behind us.”
According to John W. Burchfield, senior vice president of Covenant Bank in Batesville, the concept of a prepaid plan is to buy into it early to guarantee that one’s tuition is going to be paid for, since tuition rates rise every year.
“Do your research for grants and scholarship opportunities, more than anything,” he said. “It’s an indirect way of saving money because it cuts one of your biggest expenses.”
Parents or students should make their plans known to the bursar’s office, which processes and bills MPACT.
“The main thing is that they have to let us know that they’ve gotten one,” said Linda James, administrative coordinator in the Office of the Bursar. “I pull up their information and verify that they have MPACT. When they get their classes, I bill after (the) drop date, then I submit the bill for the money to MPACT and they pay their tuition.”
Out-of-state students must meet certain conditions to be treated as a resident to get in-state tuition. A non-resident scholarship is offered for those students who qualify after certain conditions are met.
“If a parent or a grandparent were the purchaser of the plan, and they were Mississippi residents or the student was at that time, the bursar’s office works with us and let(s) us know, and if that is the case, we get the documentation.”
Now that prepaid tuition plans are exempt by federal rules from counting toward a student’s financial aid, it’s an advantage to the student, according to Diven-Brown. Prepaid tuition plans used to be counted in the financial aid package, which would offset other aid for which one might qualify, such as student loans.
“The value of the asset would have to be reported on the FAFSA as an asset if the owner is the student or the FAFSA-reporting parent, but not as an asset as a savings or checking account, which is how it’s handled differently than when it used to be included in the package,” she said.
Student loans are need-based, normally capped according to financial need or cost of attendance in combination with other aid. Since the MPACT plan is not counted in financial aid totals, loans, scholarships, grants and work study are not affected.
“We do count the non-resident scholarship,” Diven-Brown said. “That’s the piece that my office handles at this point if it applies. Not everyone qualifies.”
Only tuition and mandatory fees are covered by MPACT, and it allows parents to make monthly or annual payments. The student or purchaser must be a Mississippi resident at the time of purchase.