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.

Comments

[chris fine]

10:08 PM on 06/28/2011

Start Your College Search Now
Apply Today – Classes Start Soon. Call 877-842-1563

[MWA1111]

01:49 PM on 06/10/2011

What a joke this state is. When will people wake up and quit voting in these idiots that treat this state like their own personal piggy bank or company.

[rwextthoughts]

12:13 PM on 06/10/2011

ILLINOIS,, COOK COUNTY,,,,CHICAGO,,,,,,DEMOCRAT MADIGANISTA CORRUPTION

[Michael Dayne]

10:52 AM on 06/10/2011

Sure go ahead and trust government with your money and your kids future. With what he have seen with government and the financial sector of late, you have to be a fool to trust either. Just saying here, but what, just what if, the banking system does fail. You think the government is going to run right out and give you your money back. I had a friend who lost money years ago when the S&Ls went under. It took the government months to reimburse him under FDIC.
Banks are probably one of the worst places to keep your money. They don't pay you interest to have it there and can't promise you it's going to be there if the bank goes under.

[robodawa]

10:19 AM on 06/10/2011

This is a heartbreak. The story people hear is: 'To succeed one must get a college degree'.
So they work like crazy, save and hope. A good deal comes along.
They take the option. Then POOF! Up in smoke goes the money.
Who is on the hook here? The families? Oppenheimer? The State?
I hope that the State will issue vouchers to the value invested that are good for the life of the potential student. If the state expects the tax payers to fund their
pension and healthcare, we expect them to make good on their investment schemes.

[corwin]

12:11 PM on 06/10/2011

First,this is Illinois.Secondly,these are Democrats.Believing them means you've failed the IQ test.94 is still open.Leave