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Prepaid Affordable College Tuition (PACT) Program

Alabama's Prepaid Affordable College Tuition (PACT) Program has been closed to new enrollment since 2008. The program has offered a four-year package and one-year package covering tuition and fees at any Alabama public college or university, convertible to private and non-Alabama institutions based on a formula. Alabama also offers the CollegeCounts direct-sold and advisor-sold 529 savings plans.

Our Ratingx

Fee Scorex




  • Program typePrepaid contract
  • Enrollment periodNormal enrollment period is September through December. Closed to new enrollments as of 2009.
  • Inception1990
  • State agency
    Board of Trustees of the Trust Fund, chaired by the State Treasurer
  • Tax deduction

Ratings & Rankings

Our overall rating for AL residents

This program is not open to you either because it has residency requirements or because it has stopped accepting new enrollments.

Our overall rating for non-residents

This program is not open to you either because it has residency requirements or because it has stopped accepting new enrollments.'s 5-Cap Ratings provides an evaluation and comparison of 529 plans, utilizing a formula that examines dozens of factors grouped into the following categories.


State residency requirements:


Who can be a participant/owner in the program?

U.S. citizens and resident aliens at least 19 years old, UGMA/UTMA custodians, and approved legal entities.

Significant time or age restrictions imposed by the program:

The beneficiary must be in the 9th grade or below and under the age of 18 at the time of enrollment. Contract benefits must generally be used within 10 years of the beneficiary's projected college entrance date.


Minimum contributions:


Contractual Features

Contract prices:

In the last enrollment period (2008), the price for a four year contract ranged from $23,938 for a newborn to $25,650 for a ninth grader. The price for a one year contract ranged from $6,408 for a newborn to $6,856 for a ninth grader.

Available tuition packages:

Contract pays one to four years of undergraduate tuition and fees at Alabama public colleges and universities.

Benefits for beneficiary attending private or out-of-state institution:

Weighted average tuition and mandatory fees charged the prior fall by public four-year institutions in Alabama not to exceed actual tuition and mandatory fees.

Contract payment options:

Lump sum, 60 monthly installments, or extended monthly payment plan. For contracts purchased during the 2008 enrollment period, the first payment was due February 1, 2009.

Are program benefits backed by the full faith and credit of the state?


Are program benefits collateralized or guaranteed in any other way?


Fees & Expenses

Enrollment or application fee:


Taxes and other Benefits

  • Tax deduction for single filers$5,000/yr
  • Tax deduction for joint filers$10,000/yr


Married filing jointly residents contributing $100/month can expect an additional $0 a year in tax savings.

Program match on contributions:


State tax deduction or credit for contributions:

Contributions, including rollover contributions, to an Alabama 529 plan of up to $5,000 per year by an individual, and up to $10,000 per year by married taxpayers filing jointly who each make their own contributions, are deductible in computing Alabama taxable income.

State tax recapture provisions:

A nonqualified withdrawal from an Alabama 529, plus 10 percent of the amount of the withdrawal, is included in Alabama taxable income to the extent of prior Alabama tax deductions. Outbound rollovers are also subject to recapture.

State tax treatment of qualified distributions:

Alabama law exempts qualified distributions from an Alabama 529 plan but does not exempt distributions from a non-Alabama 529 plan.

State tax treatment of rollovers:

Inbound rollovers are not subject to Alabama tax. The full amount rolled over can be deducted subject to the $5,000 or $10,000 annual maximum. Outbound rollovers are treated as nonqualified withdrawals.

Does the sponsoring state exclude the value of an account for state financial aid purposes?


Does participation in the program provide beneficiaries with any advantages in qualifying for resident tuition status at state institutions?


Does the program have a formal agreement with a rewards program or outside scholarship program?

Yes, the Upromise Rewards program can be linked to any 529 college savings plan. Upromise Rewards is free to join and offers members cash back for college.

Upromise Helps Families Save for College

Upromise Helps Families Save for College

Statutory protection of an account from creditors:


Distributions & Terminations

To whom are distributions made payable:

Payments are made directly to the college or university.

Account Changes

Policy regarding participant/owner changes:

Accepts requests to transfer contract ownership ($20 fee).