Fitch defends tuition plan decision
Published 8:00 pm Wednesday, October 17, 2012
From a controversial decision regarding a prepaid college tuition program to helping people find their unclaimed property, state Treasurer Lynn Fitch offered a glimpse of several sides of her office Tuesday during a visit to Brookhaven.
Speaking to two local civic clubs, Fitch discussed a decision to defer enrollment in MPACT, or Mississippi Prepaid Affordable College Tuition. The program allows people to lock in costs for future college plans at today’s prices.
“There are very few states that have true prepaid college tuition programs any more,” said Fitch, adding that those that do have major assets and have been able to shift liability away from taxpayers.
Fitch said MPACT was a “tremendous option” when it was created 15 years ago.
However, there has been an economic “roller coaster” since then and returns on investments brought into question the viability of the program. She cited an actuarial account indicating a return of 7.8 percent was needed, but that the current return is only 4.3 percent.
“When you have a gap like that, you really need to take a pause,” Fitch said.
Fitch’s decision upset some of her fellow Republican state officials, including her predecessor, now-Lt. Gov. Tate Reeves, and lawmakers. Reeves considered the move shortsighted and lawmakers were concerned the MPACT suspension would shake public confidence in the program.
Fitch said Tuesday an audit of the program is under way and there will be recommendations made when it is completed. She went on to tout the importance of college savings options, including economic development benefits of a better-educated workforce.
In a related student education topic, Fitch called for mandatory financial literacy education for high school students. Currently, such programs are optional.
Fitch said financial literacy is important for students to understand how to budget their money, to save money and to know what is involved in buying a house, a car or other big items. Also, having a financially literate workforce is an attractive feature for employers considering new hirings.
“It’s just a missing piece right now,” she said about financial literacy programs.
Fitch also promoted her office’s efforts to find the owners of unclaimed property in the state. Businesses and entities that are unable to distribute funds are supposed to turn them over to Fitch’s office after five years.
“Our job then is to find the rightful owners,” Fitch said.
Sometimes the funds are in the thousands of dollars, Fitch said. She shared several stories and likened locating owners of unclaimed property and being able to give them their money to the Publishers Clearinghouse.
“It is so rewarding,” she said.
Fitch said her office takes on the property challenge “with a vengeance.” The unclaimed property list can be searched at www.treasury.state.ms.us, and Fitch said it is updated frequently
“We want to help everyone we possibly can,” she said.