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Montgomery – State Treasurer Kay Ivey’s legislation to provide a tax deduction for Alabama families making a contribution, up to $5,000, per year, to one of Alabama’s state-sponsored college savings plans received unanimous approval by the Alabama Senate on May 1, but was contingent upon HB357 also passing to replace the lost revenue to the Education Trust Fund. The Alabama Senate gave final passage to that bill this morning.
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“I appreciate Senator Zeb Little and Representative Richard Lindsey providing their strong bipartisan support of this effort to give Alabama parents and grandparents an incentive to save for college” Ivey stated. “Alabama families need all the help they can get to pay for college tuition and other college expenses, and this bill will go a long way toward helping them.”
Alabama offers two college savings programs – the Alabama Prepaid Affordable College Tuition (PACT) Program and the Alabama Higher Education 529 Fund. PACT is based on a simple concept – pay today for tomorrow’s tuition. Through the PACT program, a contract may be purchased to prepay college tuition and qualified fee payments at any Alabama public college or university. The program also allows contract holders to attend private or out-of-state schools based on the weighted average of in-state costs.
The Alabama Higher Education 529 Fund is professionally managed by Van Kampen Investments. This program allows investors to contribute to an individual account within the 529 Trust Fund, choose from several investment options, and later use the investment results of that particular account to pay for college expenses. The program, offered nationwide, offers multiple benefits for Alabamians to save on fees and costs associated with investing in the program.
For more information about these two programs, please visit the Treasury website, www.treasury.alabama.gov or call 1-800-252-7228.
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