Senator Seeks To Alter Pre-Paid Tuition Program
By Willis Kern
State Sen. Jason Barickman (R-Bloomington) wants to make changes to the state's pre-paid college tuition program, saying it's dangerously close to "financial disaster."
He said the unfunded liabiliaties with College Illinois at the end of last fiscal year were nearly $450-million.
Barickman said it's because the state is locking in funds to families with no guarantee they’ll be there when young children eventually enroll in college.
"Anytime you have a program that is dependent on attracting new investors to meet obligations that have already been promised to current investors, it gives you pause," Barickman said.
Barickman says actuaries tell him College Illinois funds will run out of money by 2027 unless at least 1,000 new contracts are sold annually.
The Senator sponsoring legislation he says requires colleges to certify future tuition and fee costs so investment funds have solid cost figures for its contracts, and would require future sales be limited to annuity plans to create predictability, and stabilize costs.
Barickman wants parents enrolled in College Illinois to have more flexibility with their funds.
"Preserve the program that's in place so those who hold current contracts know that they'll be fulfilled, that we aren't continuing to acrue this unfunded liability that someday is going to require the state of Illinois to bail this program out," he said.
College Illinois is one of three so-called 529 college savings plans offered, but it's the only one that locks in tuition rates at the time of investment.