Ask Terry Questions College Illinois

College Illinois

By Terry Savage on July 14, 2019 | College Savings / Student Loans

I have paid $62,526 on a prepaid tuition plan for my son. He is five years from graduation, is that money guaranteed or should I pull it out and put it somewhere else. The plan I bought was $71, 780 but I got a prepayment discount.

Terry Says

I can understand your concern.  The CollegeIllinois program has announced it has a huge deficit, and is not accepting any more prepayment contracts.  Even worse, although many assumed it was “guaranteed” by the State, it is actually only a “moral obligation” of the state. And you can judge just how ‘moral’ the state of  Illinois is!

There have been several bills introduced in the Illinois legislature that would make it an actual financial obligation to make good on these contracts.  And there is some hope that the legislature will pass one in the coming year.  Also, the state could simply issue “vouchers” for tuition to the schools — and sort of force the colleges to accept them.   So, if it’s that close, I’d stick with the plan.  Remember, it will buy a lot more tuition in Illinois if the plan continues than if you try to use the cash in another state.

I have asked CollegeIllinois if there is a problem “refunding” deposits — and if you’d get any interest on the money withdrawn.  I will come back and update this post when I receive that info.


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