Ask Terry Questions Illinois College Savings Bonds

Illinois College Savings Bonds

By Terry Savage on May 11, 2015 | Investments

Terry, I hold a number of Illinois college savings bonds. They are beginning to mature this year and each subsequent year until 2024. The financial condition of Illinois has continued to erode and I am in need of some advice. Is there anything that I can do with such illiquid investments other than hold them, and hope and pray that the State does not default on these bonds.

Terry Says:  I remember when they were offered, and I bought some myself.  (They have already matured.)  Illinois has already “defaulted” on its promise that the earlier College Savings bonds would get a $100 bonus if the proceeds were used to pay tuition at an in-state school.  They never paid that bonus — and said the “fine print” said they would pay it if the General Assembly appropriated the money.  They didn’t!

Illinois has the worst bond rating of any state — and the latest Supreme Court ruling is going to make it more difficult for the state to roll over its debt as it comes due.  That has impacted the current market value of ALL Illinois general obligation bonds.

I’m not sure if there’s a “secondary” market for these bonds — which were sold at a “discount” (like the old savings bonds).  But if you decide to sell now, you’ll really take a haircut on the price you are offered.   I would sit tight, and keep your fingers crossed.

But if you want to find out what the bonds are worth now, you can search them out at the FINRA database.  Here’s the link:



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