College Illinois, the prepaid tuition program for Illinois residents, has suspended sales of new contracts amid reports that the $1 billion program is facing a 30% shortfall.
Earlier this year, an investigation by Crain’s Chicago Business revealed that the College Illinois Prepaid Tuition Program had the greatest deficit of any prepaid tuition program in the United States and that the fund was plowing money into unconventional – and risky – investments to close the gap. Moreover, many parents were shocked to learn that the program itself was not guaranteed by the state if it came up short on cash.
More than 30,000 Illinois families hold contracts in College Illinois. The plan allows parents to lock in tuition costs at public universities at today’s prices before their children actually go to college.
Kym Hubbard, chairman of the Illinois Student Assistance Commission, says the commission plans to make recommendations to the governor and lawmakers early next year on what can be done to fix College Illinois. Those recommendations are likely to include major changes to the 13-year-old program. Those changes could mean universities, parents or both would have to plug the gap between what the plan accumulates and actual tuitions, according to a Dec. 13 story by Investment News.