Distrust Hobbles Illinois’ Prepaid Tuition Plan

No matter how good you've been this year, there's one thing we know you're not getting for Christmas: A pre-paid tuition contract from the state's College Illinois! plan.

Established in 1999, the plan was a way for parents or grandparents to pay tuition in advance through a contract. But Eric Zarnikow, director of the Illinois Student Assistance Commission, decided to stop selling those contracts last year.

For one thing, College Illinois! has struggled almost from the beginning.

"College Illinois! went through a period from 2000 to 2010 where we saw close to double-digit growth in tuition and fees in Illinois. That coincided then with the disruption in the financial market from the great recession," Zarnikow says. “So as a result of those two things...the plan became underfunded."

For another, despite the enthusiasm built into the plan’s name (the exclamation point is part of its registered trademark), the state’s two-year budget impasse, which was particularly tough on higher ed, made it more difficult to talk people into trusting Illinois.

"What we've found with potential contract holders, when we talk about it, it's not as reassuring as it once was, for the moral obligation of the state,” Zarnikow says.

That “moral obligation” is the only obligation included in the statute that created College Illinois! It’s a common legal term, used on other items the state funds as well, that stops just short of requiring the state to rescue the program if it fails.

"Our understanding is that the moral obligations of the state have always been met, but there's not a legal requirement by the General Assembly to do it," Zarnikow says.

College Illinois! can continue to meet its obligations through 2026, but Zarnikow is hoping lawmakers will approve a measure to reinforce the plan's finances this spring.

“We want to make sure that the General Assembly passes a bipartisan bill that really protects and strengthens the commitment for the current contract holders,” Zarnikow says.

College Illinois! is entirely separate from the state’s BrightStart plan — a savings plan that operates like a 401(k).