Per the Governor’s guidance and in order to slow the transmission of the virus and protect our communities, all ISAC offices have been closed to the general public. ISAC continues to provide college planning and financial aid services to students and families via phone, email, text, videoconferencing, webinars, and more. Learn more at https://www.isac.org/home/covid-19.
PROGRAM UPDATE, FEBRUARY 18, 2021
Over 9,700 students attended college in fiscal year 2020 using College Illinois!® benefits of approximately $116.8 million. Program enrollment has remained closed since 2017, as ISAC has engaged with legislators and the Governor’s office to help define proposals to address the Program’s 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.
Among the bills and initiatives that ISAC has supported to address the unfunded liability and protect plan holders, the agency has continued to advocate annual state payments to the Illinois Prepaid Tuition Trust Fund to begin to address the unfunded liability now before it becomes immediately necessary to call upon the moral obligation of the State of Illinois. By starting immediately to make level payments that would continue for more than a decade, the proposal would honor the state’s commitments and save it money in the long run, allowing the state to budget intelligently, with predictable, manageable payments.
In his proposed fiscal year 2021 Budget, Governor Pritzker had recommended the same approach: An appropriation of $27 million would have begun to address the unfunded liability for College Illinois!. Unfortunately, the COVID-19 pandemic and the response to it changed the State’s budget outlook, and this part of the Governor’s proposal wasn’t included in the budget that the General Assembly approved for the current fiscal year.
While the pandemic is still placing significant constraints on the budget, we are encouraged that Governor Pritzker’s proposed fiscal year 2022 Budget again includes funding ($20 million, described as the first annual payment) to begin to address the Program’s unfunded liability. ISAC continues to strongly support the Governor’s plan to amortize the liability and begin to address it.
If you would like to remind your state representative and senator of your support for this proposal, we encourage you to do so. You can find contact information for your elected officials by using this simple tool.
According to the June 30, 2020 Actuarial Soundness Report, Program assets totaled about $588.6 million, corresponding to a 63.4% 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. However, based on the most recent actuarial soundness report, if the Program never sold another contract, these funds alone would be sufficient to cover payments only through fiscal year 2024. Additional state funding would be needed beginning in fiscal year 2025.
The College Illinois! Prepaid Tuition Program continues to be backed by the moral obligation of the state, pursuant to which the Governor would submit to the Illinois legislature an amount, as certified by ISAC, that would be sufficient to pay all program obligations during any fiscal year there is a current funding shortfall. Fulfilling the state's moral obligation would take a vote of the General Assembly, but to our knowledge such obligations have historically been honored.
Program financial statements, including the June 30, 2020 Actuarial Soundness Report, are available at https://www.collegeillinois.org/AboutCollegeIllinois/529Financials.html.