As Illinois colleges come closer to the breaking point from the state’s fiscal crisis, it has just been reported that the College Illinois pre-paid 529 plan is also going broke.
Illinois Universities Bond Ratings Downgraded Again
MCPT believes the recent downgrade on Illinois’ Bond rating will result in even less students applying for admission at in-state universities in 2018. This will likely result in lower financial aid offers at other Midwest universities because of the lower demand for Illinois students.
Despite these problems, we are puzzled why Illinois continues to still run its slick ads touting the great benefits of the College Illinois Plan and has failed to close it down to new applications.
The reasons, of course, are obvious. Closing it down would lock in the $350 million shortfall. To make matters worse, as the Crain’s article points out, the state does not promise to make contract holders whole.
To say the 529 is backed by the good faith of a state on the verge of bankruptcy doesn’t seem like a good bet to me.
Why are the Apparent Troubles of this Program Being Kept Under the Radar?
MCPT tried to find other recent news about the failing College Illinois 529 Plan and we couldn’t find any. We can only wonder why such important news that could protect thousands of Illinois families from putting their college savings at risk, is being kept under wraps.
Why in the world are we trying to protect a program that requires a constant flow of new investors to avoid going bankrupt?
Do you have questions and concerns about your Illinois 529 plan or other aspects of college funding? My College Planning Team’s financial team would be happy to help. We offer complimentary consultations for families of college-bound students. Click here to schedule now or contact Jim Slowik.