March 24, 2019
Thank You for Your Support for Proposed Legislation to Improve and Strengthen the College Illinois!® Program
Thank you to the many contract holders who filed witness slips to support proposed legislation to strengthen College Illinois! If you are visiting this page for the first time and looking for some background or would just like an update, here is the latest information.
Over 10,800 students attended college in fiscal year 2018 using College Illinois! benefits of more than $125 million. Program enrollment has been on hold as ISAC has worked with elected officials to advance legislation to strengthen the Program and address the unfunded liability. The Program continues to operate as usual for our current contract holders, with no change in benefit payments, customer service, or plan administration, and continues to be backed by the moral obligation of the state.
According to the June 30, 2018 actuarial report (issued November 8, 2018), Program assets totaled about $846.4 million, corresponding to a 73.3% funded ratio. (Note that actuarial reports necessarily represent a point in time and will change based on a variety of factors.) The Program retains a substantial investment portfolio in a separate trust fund to pay obligations for a number of years without requiring funding from the state. Based on the current actuarial soundness report, if the Program never sold another contract, funds would be sufficient to cover payments through fiscal year 2025.
During the last two years, ISAC has presented to Illinois House and Senate Committees and communicated with legislators, their staff, and the Governor’s Office at numerous individual and small group meetings/briefings to help define and advance legislation to address the unfunded liability. During these meetings, legislators expressed support for ensuring that all current contract obligations would be honored. Consistent with that support, in February 2019 identical bipartisan bills were introduced in the House and Senate that, if approved, would provide even greater financial protection for our contract holders.
While the Program is currently backed by the moral obligation of the state, fulfilling the state's moral obligation would have to be done through an annual appropriation bill passed by the General Assembly and signed by the Governor every year there is a shortfall. By contrast, Senate Bill 2137 and House Bill 3630 would provide the state’s full faith and credit backing for all College Illinois! contracts. Full faith and credit provides a guarantee of funding from the state to pay contractual obligations should the Prepaid Tuition Fund have insufficient funds to do so. No additional action from the Governor or General Assembly would be needed with full faith and credit, making it an even stronger and more reliable backing than the moral obligation of the state.
As part of its progress through the legislative process, Senate Bill 2137 was heard in the Senate Higher Education Committee on March 19, 2019. At the hearing, members of the Higher Education Committee expressed their support for the bill, and noted the well over 1000 witness slips filed in support of it. With our contract holders’ and other support in advocating for the bill, it passed unanimously out of committee and will now advance in the legislative process. The identical House Bill has not yet been set for a hearing.
Please note that the legislation is likely to undergo changes as it moves through the process. We do expect an amendment to be added to the bill that, like the introduced bill, would apply the full faith and credit guarantee to all outstanding contracts, but would preclude any sales of additional contracts. Should the bill be amended in this way, it would not impact administration of the Program for current contract holders, and those with beneficiaries in college would continue to see benefits paid as usual.
If you have not already done so and would like to express your support for these bills, it is helpful to directly contact your own state legislators, either by phone, email or mail. You can find contact information for your state representative and state senator by using this simple tool. When you contact them, let them know you are a College Illinois! contract holder or student who supports Senate Bill 2137 and House Bill 3630.
Program financial statements, including the 2018 Actuarial Soundness Report are available at https://www.collegeillinois.org/AboutCollegeIllinois/529Financials.html.