SPRINGFIELD—House Bill 4116 was filed today by State Representative Jim Durkin (R-Western Spring) to ensure that College Illinois! funds will no longer be placed in high risk alternative investments. This legislation removes the program’s current exemption from the Public Funds Investment Act.
“Numerous factors have led to the current College Illinois! shortfall, one of which was the approval and placement of investments in high risk hedge funds and real estate ventures by the previous board and management,” said Rep. Durkin. “This legislation will tighten investments by making the Illinois Prepaid Tuition Trust Fund a component of the Public Funds Investment Act.”

The Act places certain restrictions and safeguards on the funds by limiting allocations to safer and more reliable investment options. It allows the public funds to be placed in a wide variety of investments as long as the investment institutions meet certain criteria; for example money can be placed in bonds as long as they are backed by the United States or in Banks as long as they are insured by the Federal Deposit Insurance Corporation. The Act currently applies to investments made by the State of Illinois and local governments.

“There will be many changes needed to return the program to stability and this is a step to strengthen the governance and the foundation of the investments,” said Durkin. “We will continue to work with ISAC in a cooperative manner to return confidence in the program and will work with the state universities to discuss college affordability as well. This must be a team effort.”

Members on the College Illinois Recovery Taskforce have been meeting for more than six months to explore solutions, and this legislation was one item produced by that taskforce.

“House Republicans will continue working during session to find solutions for this program,” said Representative Darlene Senger (R-Naperville). “This legislation is just one of many items we will establish to help the 35,000 families with contracts.”