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CHAMPAIGN — A state audit has found that the troubled College Illinois prepaid tuition plan continues to run a deficit well into the hundreds of millions of dollars as the agency that runs the program searches for a way get it back on track.

The Illinois Auditor General’s office said in an annual report Tuesday on the Illinois Student Assistance Commission that the tuition program’s deficit as of June 30, 2011, was down from $338 million to $262 million. But the commission itself notes that by another accounting method also used in the audit, the deficit rose slightly from $531 million to $536 million.

The commission runs the tuition program and is also the state’s primary provider of college financial aid.

The $1.1 billion tuition plan has run a deficit for several years, a problem contributed to the ouster of the executive director. With those problems, College Illinois last year stopped signing new contracts with families.

The audit didn’t offer comment on the tuition plan’s financial status, and Auditor General William Holland wasn’t available for comment.

The commission agreed with the audit’s findings and accepted its recommendations, and a spokesman said the commission’s chairwoman, Kym Hubbard, is now working with Gov. Pat Quinn, lawmakers and others on potential legislation she hopes will repair the college tuition plan.

“I think what’s most important for the program is to arrive at a consensus before a bill is prepared, just to make sure everybody is on board and engaged,’’ Student Assistance Commission spokesman John Samuels said.

“We hope to reopen contracts as soon as is practical,’’ he added.

College Illinois lets parents lock in tuition costs at public universities years before students go to college but has long operated at a deficit. Currently, the plan has contracts with roughly 34,000 families covering tuition for about 54,000 students, Samuel said.

Problems with the plan contributed to the removal last year of its executive director, Andrew Davis, who was replaced earlier this year by Eric Zarnikow. The plan stopped selling new contracts to parents last fall amid the turmoil.

The state Attorney General’s office also opened a review of the tuition program last summer. Attorney General’s spokeswoman Maura Possley said Tuesday that the review continues.

The audit released Tuesday found that the tuition plan’s financial situation benefited from improvements in the return on its investments, increasing to $1.1 billion from $971.5 million a year earlier. Those investments make up the bulk of the plan’s assets.

But even with the improvement the plan’s liabilities still totaled just short of $1.4 billion.

Samuels, the commission spokesman, noted another way of measuring the agency’s financial position also noted in the audit — using the market value of its assets — put the deficit at the much higher $536 million, a slight increase.

According to Samuels, the commission actually prefers to use the higher figure because it’s based on the method other prepaid tuition programs around the country use.

The audit also faulted the tuition plan for in some instances failing to comply with the with state procurement code or with its own investment policy.

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