Madigan reviewing troubled college savings program

SPRINGFIELD — The Illinois attorney general has opened a review of a troubled college savings program, a spokeswoman for Attorney General Lisa Madigan said Wednesday.

Natalie Bauer said Madigan is “looking into some issues” at the Illinois Student Assistance Commission. She would not elaborate and said there is no timetable for completing the probe.

The commission runs the prepaid tuition program College Illinois. A state audit released in April questioned management of the program’s invested funds and said it had a deficit two years in a row of more than $300 million.

Auditor General William Holland found that the commission did not follow state law when it hired a San Francisco company to advise it on debt restructuring. The company offered only one opinion — a $12.8 million investment in Shorebank Corp. that was lost last year when Shorebank collapsed.

College Illinois lets parents and others invest money now and lock in a future tuition level. But it’s not guaranteed, so investors would be out of luck if the money runs out.

Lawmakers have ordered a more thorough audit. Rep. Jim Durkin, a Western Springs Republican, suggested the comptroller take over the program.

In May, Gov. Pat Quinn replaced commission chairman Don McNeil with Kym Hubbard from the accounting firm Ernst & Young, calling for “a fresh approach.”

Spokesman John Samuels said the commission has not been contacted by the attorney general or other law enforcement officials. Commission representatives have met with Holland as he begins his new audit, Samuels said.