Students have alternatives to pay loans

Published 6:00 pm Friday, March 12, 2021

Hidden in the Biden administration’s $1.9 trillion spending bill was a small provision that made student loan forgiveness tax free, which insiders believe was a sly step toward a new federal handout.

National Democrats proposed various student loan forgiveness programs during the 2020 campaign. President Biden has publicly settled on $10,000 worth for a total taxpayer cost of $373 billion. In and of itself, that’s a steep price, but he’s getting pressure to go further from others in his party, including Senator Bernie Sanders who wants to erase all student loan debt at a cost of $1.6 trillion to taxpayers. There are principled reasons to doubt the effectiveness and equity of these loan forgiveness proposals, but the cost alone should cause most taxpayers to bristle.

That’s not to say rising tuition prices aren’t an issue. Between 2008 and 2018, costs at Mississippi’s public universities increased by 42 percent, according to the Center on Budget and Policy Priorities. Not surprisingly, student debt increased 58.5% across Mississippi during this time as well, with the average student graduating a little over $30,000 in the red.

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There is a conservative solution to this policy crisis — one that revolves around personal and financial responsibility, rather than another government entitlement program. It’s called the Mississippi Prepaid Affordable College Tuition plan, or MPACT, and it’s administered by my team at the State Treasury.

With an MPACT plan, Mississippi families can lock in today’s tuition rates and prepay college for their children or grandchildren. The plan is guaranteed by the State of Mississippi, but it doesn’t add a burden to taxpayers. Conversely, those who enroll will likely receive a tax break.

While the pricing on these plans will vary depending on a number of factors including your child’s age, it’s safe to assume the younger your child is the lower your monthly payment will be.

The State Treasury is currently accepting MPACT applications, but the enrollment period is limited. Families can open a plan from September 1 to May 31, so it’s best to act quickly. Enrollment for newborns, however, is open throughout the year.

College is expensive, but the investment can pay off. Researchers at the Federal Reserve Bank of St. Louis found that weekly wages for college graduates was 80 percent higher than their counterparts with a high-school diploma. Nonetheless, taxpayers shouldn’t be forced to foot the bill.

MPACT offers a responsible way to lower student loan debt without creating another entitlement program or increasing the burden on hardworking taxpayers. If you would like to learn more, please visit or call my office at 601-359-3600.

Mississippi Treasurer David McRae is the 55th Treasurer for the State of Mississippi.