Bright Start College Savings Program Contributors Feel Duped Over Matching Funds Promise
A troubled college savings fund is in hot water again, as parents who invested in the program feel misled about promised matching funds that won't be coming through.
The Bright Start College Savings Program, run by the State of Illinois, was supposed to match parent contributions dollar for dollar, up to $250. The offer was limited to the first 2,500 investors, but the program's website was slow to update when that threshold was reached.
As a result, the Associated Press reports, thousands of people invested in the program after the bonus had expired, though they had no way of knowing the deal was over. They will not be receiving matching funds.
"It's sort of a crass move to dole out these funds as a publicity stunt, but what you've done is worse by inducing people to invest in exchange for a promise you knew (at least by Friday afternoon) you couldn't keep," one parent, John Labbe of Evanston, said in an email to Bright Start, printed in the Chicago Tribune.
The trouble is an early black mark for state treasurer Dan Rutherford, who emailed enrollees in Bright Start last week announcing the offer and telling investors to check the program's website to find out when the offer would end.
Bright Start was also the bane of another recent state treasurer, Alexi Giannoulias, during his bid for the U.S. Senate. Giannoulias presided over catastrophic losses in the fund's savings, after investors put their money in Oppenheimer's Core Plus Fixed Income Strategy, which was supposed to be a conservative investment option, according to the Chicago Tribune. The fund, however, lost 38 percent of its value in 2008. That investment cost Bright Start tens if not hundreds of millions of dollars, and was an albatross around Giannoulias' neck throughout the campaign -- which he narrowly lost to Republican Mark Kirk.
Meanwhile, another state college fund issued its own bad news Thursday. FOX Chicago reports that College Illinois is facing around $300 million in operating debt.