College tuition program under fire

Illinois House and Senate lawmakers are proposing a revamping of College Illinois!, a prepaid tuition program they say is failing. However, those in charge of it now say the program is doing just fine.

Lawmakers want to shift the control of the program from the Illinois Student Assistance Commission, or ISAC, to the comptroller’s office.

State Sen. Shane Cultra, R-53, said the proposal, initiated by State Rep. Jim Durkin, R-82, will ensure better management of the entire tuition program and will do better after implementing the change.

“We just thought it needed more oversight than what ISAC was providing,” Cultra said. “We thought if we put the comptroller into this, we’ll have better oversight over all the money that was invested.”

Legislators also think ISAC has not done its duty of properly managing and investing the money. ISAC invests the money and pays the remaining funds left to the universities when students go to college, Cultra said.

“We want to take it away from their prerogative and give it to the comptroller and let her invest the money,” he said. “With less risky investments, hopefully we won’t have any more deterioration in the funds.”

Recently, the College Illinois! program has been having funding problems. Cultra said the program is underfunded by 31 percent, with 38 percent of its money in hedge funds that are currently at risk due to the economic climate.

Another reason for the financial difficulties of College Illinois! is the fact that it locks in the tuition price from the year the contract was purchased. Cultra said this is helpful for students in lowering their college tuition, but the program is projected not to be able to come up with the money for everyone who has entrusted funds in College Illinois! due to rising tuition costs and poor investments on ISAC’s part.

“I suppose (College Illinois!) was a good idea when it was thought of,” he said. “(Now) it’s the state government trying to promise too much.”

John Hockersmith, assistant director of student services for the University system, said 1,553 students at the University used College Illinois! for their 2011 spring semester tuition.

Andrew Davis, executive director of ISAC, said families are partial to the prepaid tuition plans, because it helps eliminate some of the anxiety about tuition prices years from now.

“Since no one knows what U of I’s tuition, or any other school’s for that matter, will be 15 years from now, this (program) helps alleviate a huge uncertainty that many families worry about,” Davis said.

Although legislators suggest that the College Illinois! program is in financial difficulty, Davis said the program is doing well financially.

“The fund has more money than it has ever had before, about $1.15 billion (for) this fiscal year that will end on June 30,” Davis said. “It’s poised to deliver the very best investment results in the entire 12 years that the fund has existed.”