A joint hearing before the state Senate Appropriations II and Higher Education committees was held Tuesday to receive information on the College Illinois program and how it will continue in the coming years.
Eric Zarnikow, executive director of the Illinois Student Assistance Commission, gave a presentation to the joint committee members, outlining the College Illinois program and what it needs to continue.
The Illinois Student Assistance Commission administers the College Illinois program, which is a tax-advantaged plan to encourage families to set aside funds for future college costs. The program is a pre-paid 529 college tuition program.
Eric Zarnikow
| isac.org
"Our mission is to help make college accessible and affordable for students," Zarnikow said. "We're a student-centered agency."
The program has been funded by contract purchasers and not by state funds to date, Zarnikow said.
"The program is backed by the moral obligation of the state," Zarnikow said.
Zarnikow said the moral obligation clause makes prospective purchasers nervous.
"People would ask, 'Why should I buy this program?' and (when) we talked about the moral obligation of the state, given all of the build-ups to that they were less than comforted that the state would be there and that the state would make good on the moral obligation," Zarnikow said.
Zarnikow said the unfunded liability by the end of the fiscal year last year was $320 million. He believes the state will need to provide $81 million before 2026 to meet the moral obligation clause.
Sen. Dan McConchie (R-Hawthorn Woods) asked if the program was supposed to be self-sustaining.
"Schools don't have skin in the game," McConchie said. "Schools don't have any responsibility—if they doubled tuition tomorrow, you'd just have to suck it up? Changes need to be made if we are to start re-selling contracts. There may not be a long-term solution to College Illinois's funding issues without commitment on the part of universities to hold down future tuition."
Sen. Steve Stadelman (D-Rockford) questioned if the program is even salvageable.
"I believe is that with full faith and credit we will definitely sell more contracts than we would with just the moral obligation," Zarnikow said.
College Illinois began more than 20 years ago. It works by allowing families to purchase tuition for a semester of college at today's rates to be used at a later date when a child is ready for college. Zarnikow said the program can be used at universities and community colleges both in state and out of state.
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