And it turns out that the state doesn’t guarantee the funds that the 55,000 participating families paid in.
The deficit of the College Illinois Prepaid Tuition Program also is far larger than the fund is declaring. Administrators recently adopted new calculations that mask its size.
The performance of the $1.1-billion fund is crucial to ensuring that the prepaid plan’s nearly 55,000 family participants get what they have paid for. That’s because, unlike in five other states, Illinois doesn’t promise to bail out the fund if it runs short of cash, contrary to what even some savvy investors and financial planners think. Instead, state law requires only that the governor ask the Legislature for help if the program can’t meet its commitments. Lawmakers are under no obligation to act.