Illinois' prepaid tuition program has 30% funding gap, report says

[n2doc]

By Ryan Haggerty
Chicago Tribune reporter
10:28 p.m. CST, December 13, 2011

The state's troubled prepaid college tuition program is about 30 percent short of the funding needed to meet its projected obligations, according to a report released this week.

The report, conducted by actuarial consultants Gabriel, Roeder, Smith & Co., shows that the College Illinois program had a deficit of almost $560 million as of March 31.

The program, launched in 1998, allows participants to buy contracts locking in today's prices for future tuition and fees at the state's public colleges. Recently, however, it has been heavily criticized for its investment strategy, slow sales and funding shortfall.

The state Student Assistance Commission, which oversees the program, stopped selling contracts Sept. 30.

more
http://www.chicagotribune.com/news/local/ct-met-illinois-prepaid-college-tuition-1214-20111214,0,1794529.story

Just like pensions. Just wait until all those parents find out that their 'prepaid' plan only covers 2 years....

[kysrsoze]

1. Well, that's just great. We were thinking about doing this for our daughter's education. Sheesh...

Thanks for posting this, Ryan.

[exboyfil]

2. Lets put this in perspective

Many of the prepaid tuition programs are in trouble (maybe it is most). These programs are set up by professional people who are near the top in terms of success in public life. They are managed by money professionals who have had extensive education and training. They cannot keep up with tuition increases and market forces.

HOW CAN MIDDLE CLASS PEOPLE BE EXPECTED TO KEEP UP EITHER!!!!!! If you make much more than $50K/yr as a family you get nothing in grant or scholarship dollars. Projected cost at our universities is $25/K fully loaded and it has to come from almost entirely family income, savings, and student loans. The situation is not sustainable.

Give you a perspective. I was outlining my plan to have my oldest daughter complete her Freshman year of college while in High School to her guidance counselor. I explained that it had more value to her than winning the second tier scholarship (one in which you have to walk on water to get - I know a 4.0 with lots of extracurriculars and a very high ACT score (35) and that is what she got), but I could not get the guidance counselor to understand what I was talking about.