Illinois treasurer cites private tuition restriction on college savings plans

SPRINGFIELD — Illinois families with Bright Start or Bright Directions college savings plans will not get a break on their state taxes if they use those accounts to pay for private K-12 tuition, Treasurer Mike Frerichs said Thursday.

And if they try to claim that deduction, they could potentially face a tax penalty from the state, he further warned.

The new federal tax law includes a provision allowing families with so-called 529 college savings plans, originally only for higher education expenses like tuition, fees and books, to use those tax-deductible funds for private K-12 tuition starting this year.

“Our analysis concludes that families who use Bright Start or Bright Directions money on elementary or high school expenses and then cite those expenditures when seeking tax relief will be in conflict with state law and could incur tax penalties if audited by state authorities,” Frerichs said.

The Illinois Department of Revenue concurred with the treasurer’s analysis, saying “the Illinois plans only allow expenditures on post-secondary education without penalty,” and that “In order to expand the definition of qualified expenditures, section 16.5 of the State Treasurer Act would need to be amended.”

The idea behind Illinois’ 529 savings programs, Bright State and Bright Directions, is to incentivize state taxpayers to save money for themselves or loved ones to attend college. The plans have been popular as they are not subject to federal income taxes and contributions are tax-deductible up to $10,000 for an individual or $20,000 for a married couple on state income taxes. And when it comes time for college, withdrawals from these accounts are exempt from state and federal taxes.

According to Frerichs, more than 450,000 accounts are open in Illinois, with about $9 billion invested in them.

“The whole idea on the state tax deduction was to incentivize saving for college,” Frerichs said. “It was not to incentivize private education.”

Though Illinois residents with plans will be able to use them for private K-12 tuition, they will have to pay the regular 4.95 state income tax rate on that cash. But, many, namely the wealthy, still stand to benefit from escaping federal taxes.

“Anytime you put a benefit in the code, the wealthy most likely will use it more aggressively unless the benefit is phased out at higher income levels — as is the case with many benefits put in the tax law,” said DePaul University professor Ron Marcuson, a tax expert. “I have not analyzed all aspects of Section 529 plans but it does not appear the benefit is phased out as the taxpayer’s income increases.”

However, Frerichs is worried that the confusion caused by conflicting state and federal policies will lead policyholders to write off that expense as a state tax deduction.

The Democratic treasurer said such a write-off, in addition to violating Illinois tax code, is in conflict with the spirit of the program, to save money long-term for college. Instead, Frerichs said the new federal provision opens up opportunities he likened to money laundering.

“Now you could see someone who’s already sending their kid to private school, has a $10,000 tuition bill; instead of giving $10,000 directly to the school, they can put it into a 529 account and then next day, write a check from their 529 account to a school,” Frerichs said. “They’ve not actually saved any money and they didn’t invest in it, they didn’t earn any interest off it. It’s just basically money laundering, it’s a pass-through for tax avoidance.”

If this were to occur, Frerichs said it would could have a negative impact on tax revenue for the state.

“There’s uncertainty of what’s going to happen if they write a check,” Frerichs said. “We want them to know that there are potential penalties out there for doing this, but our hope also is that the General Assembly and the governor will provide some clarity on what they would like.”




04-Pens 20,HE 2 Coalition,26-Delivered,01-All No Sub,10-SchoolColl,02-Pol,19-Legal,03-HL 20,16-Econ,HE Blog


via News – Journal Star

January 18, 2018 at 07:09PM

Illinois treasurer cites private tuition restriction on college savings plans

Some ICC instructors get a chance to continue teaching or retire

EAST PEORIA — Five of the 10 full-time Illinois Central College faculty members who recently learned they were no longer qualified to teach at the community college now have new options.

The ICC board of trustees voted unanimously Thursday to offer eligible former faculty members a voluntary early retirement package or the possibility of a paid sabbatical to take the courses necessary for certification to teach. Tuition costs would be reimbursed at the end of the one-semester sabbatical.

Four of the five are eligible for the retirement incentive, which equals one-third of their base salary. But all five could choose the paid sabbatical, though it would have to approved first by ICC President Sheila Quirk-Bailey.

“These are quality faculty, we don’t want to lose them,” Emmanuel Awuah, vice president of academic affairs, told board members as he explained the sabbatical offer.

The other five faculty members affected by new teacher-qualification guidelines will continue to teach in areas where they are certified.

Though it did not come up at the board meeting, more than 25 percent of the community college’s part-time faculty were also affected by changes in the college’s accreditation requirements.

Quirk-Bailey said the college is providing low-cost courses on campus, which would make it easier for many of the part-time teachers to gain certification.

Dozens of teachers were notified over Thanksgiving break that they would no longer be eligible to teach courses that transfer to four-year colleges. Some of the teachers had taught at ICC for more than a decade.

In June 2015, the Higher Learning Commission, the accrediting agency for about 1,000 institutions in 19 states, issued revised guidelines on faculty qualifications. The guidelines require teachers to have a master’s degree or graduate-level credits in the courses they teach.

Of the colleges 491 part-time faculty members, 91 were told they were no longer eligible to teach. The new guidelines affected 10 of 167 full-time faculty members.

HLC is scheduled to visit the campus in 2020. Administrators said they want to see faculty get the credentials they need by 2019.

Pam Adams can be reached at 686-3245 or Follow her on Twitter @padamspam.



HE 2 Coalition,07-SocISTLAdv,19-Legal,12-Coll,HE Blog


via News – Journal Star

January 18, 2018 at 07:31PM

Some ICC instructors get a chance to continue teaching or retire

LLC president: Community college an affordable alternative

Over the past decade a crisis has been brewing that has the potential to profoundly impact the very foundation of higher education. The crisis surrounds the precipitous rise of student loan debt. Over the past decade student loan debt in the United States has grown by 150 percent, topping out at $1.4 trillion. As Forbes magazine notes, “student loan debt is now the second highest consumer debt category – behind only mortgage debt – and higher than both credit cards and auto loans.”

More than 44 million U.S. residents, roughly 14 percent of the population, are saddled with student loan debt. The data demonstrates that student loan debt is forcing many individuals to delay major life events, like purchasing a home, getting married or having children.

Fortunately, college students in our area have the opportunity to create a future with a much brighter forecast. By choosing Lake Land College to start, or earn, their college degree their future life plans can include vacations, new cars, a walk down the aisle and mortgage payments. Lake Land College’s tuition and fees for two years are about $7,800, including textbooks. In contrast, the average cost for tuition and fees for the first two years of a bachelor’s degree from a public university is about $28,000. Add on the cost of housing, estimated at $20,000, and the purchasing of textbooks, estimated at $2,600 and the tab for those two years quickly escalates.

In essence, it’s a comparison of $50,000 to $8,000 for the first two years of a bachelor’s degree. That’s an enormous difference when thinking about the potential debt facing a college graduate. The gap grows wider when compared to private colleges or technical schools.

As an institution, we are committed to creating an environment where a student can earn a college education and enter the workforce with minimal debt. Two ways that we assist students are through Lake Land College Foundation scholarships and the Presidential Scholarship. All high school students have the opportunity to qualify for the Presidential Scholarship by graduating in the top 15 percent of their class or earning a 1240 on the SAT or 26 on the ACT. Each year, the Lake Land College Foundation awards nearly $400,000 in scholarships to deserving students. I encourage all who will be attending Lake Land this fall to complete the application by February 1 at 5 p.m. online at

While we often hear requests from legislators and commitments from university presidents to minimize the cost of higher education, community colleges in Illinois have been living up to that commitment for more than 50 years. And, students are taking note. In Illinois, two-thirds of the undergraduate students enrolled in public higher education are attending community colleges. In our own Lake Land College district, community college is the top choice among high school graduates with more than 50 percent of the college-bound class of 2017 starting the fall semester as Lakers.

The higher education landscape continues to evolve with emerging technologies and heightened demands for workforce training. Community colleges are agents of change that readily adapt to the evolving needs of the communities we serve, yet one area we will hold steadfast is in our pledge to maintain opportunities for a quality, affordable college education.

Josh Bullock is the president of Lake Land College

07-SocISTLAdv,12-Coll,22-Talk,HE 2 Coalition,HE Blog


via – RSS Results in opinion,opinion/* of type article

January 18, 2018 at 02:53PM

LLC president: Community college an affordable alternative

University of Illinois freezes in-state tuition for fourth year

University of Illinois board members approved a fourth consecutive base tuition freeze for incoming in-state students, a move partially aimed at attracting more Illinoisans to the system’s three campuses.

Trustees voted unanimously Thursday morning to keep base tuition rates the same for Illinois residents who enroll as undergraduates at Urbana-Champaign, Chicago or Springfield in the 2018-19 school year.

University President Timothy Killeen announced this month that he would propose fixing the base tuition for the fourth time. The last time the university locked tuition rates for this long was from 1974 to 1977.

Illinois residents this fall will pay $12,036 a year at Urbana-Champaign, $10,584 at Chicago and $9,405 in Springfield. Those are the same base rates paid by in-state students enrolled each year since 2014. The total price of attendance is more than double that after adding in fees, and room and board.

While base tuition remains the same, there will be higher rates for several categories of fees and room and board this year. Students in prominent programs like engineering and business will also continue to pay higher tuition.

Board Chairman Timothy Koritz in supporting the freeze pointed to recent data confirming that Illinois is continuing to lose its homegrown students to other states for college.

Statistics from the Illinois Board of Higher Education and the National Center of Education Statistics show more than 19,000 Illinois residents left the state to attend college in fall 2016, the most recent year available. Only New Jersey loses more of its students to other states.

According to the state board, Iowa, Indiana and Wisconsin universities each enrolled more than 4,000 Illinois students in 2016. Illinoisans comprised one-third of all the non-resident students enrolling in Iowa and Wisconsin schools that year, and about one-fourth of the influx to Indiana universities.

“We need to make it a priority to reverse this trend,” Koritz said.

Illinois’ Truth In Tuition law requires universities to keep tuition rates the same for four years but schools can increase other costs of attendance.

Fees at Urbana-Champaign will increase by $20, to $3,058 per year. Non-resident and international student tuition will go up by 1.6 percent. Room and board will remain the same.

There also will be a per-semester increase for international students in the College of Liberal Arts & Sciences for the first time this year. Those students will add $750 to their tuition each term starting in the fall.

Killeen said money generated from that will help fund programs and scholarships for first-generation, underrepresented and need-based Illinois students.

Fees at the Chicago campus will go up $14, to $3,146 a year. Base tuition will rise 1.4 percent to 1.5 percent for out-of-state students and 1.6 percent for international students. Standard room and board charges will increase 1 percent, to $11,070 per year.

Annual fees at the Springfield campus are to increase $200, to $2,426, starting in the spring. The change incorporates a student-approved charge to help pay for a new student union. Tuition rates for non-resident freshman students and the price for the standard housing and meal plan will not change.

Barbara Wilson, vice president for academic affairs, said the tuition freeze means University of Illinois schools compare favorably to other Big Ten and peer institutions that have raised rates by higher percentages in the last few years. Wilson also said University of Illinois enrolls a higher percentage of in-state students than similar schools.

But even with the tuition freeze, all three University of Illinois institutions post some of the highest rates for tuition and fees compared to schools of similar size and prestige. Urbana-Champaign’s rates for first-time, full-time undergraduates are the second highest among schools that include University of Michigan, University of Wisconsin and several schools in the University of California system, Wilson said.

Trustee Donald Edwards called on university administration to explore why University of Illinois is consistently pricier than its competitors.

“We remain high in terms of tuition but we receive about the average of our operating funds from the state versus our peers,” Edwards said. “We’re headed in the right direction but we have a lot of work to do.”

In other business, trustees re-elected Koritz to serve as chairman of the board. Koritz assumed the top seat on the board for the first time last year.



Illinois’ higher education leaders at odds over proposed budget »

Couple donate $150 million to University of Illinois in its largest gift ever »

University of Illinois plans public-private Chicago innovation center with Rauner backing »

01-All No Sub,02-Pol,03-HL 20,04-Pens 20,12-Coll,16-Econ,19-Legal,HE Blog,HE 2 Coalition


via Home – Chicago Tribune

January 18, 2018 at 02:30PM

University of Illinois freezes in-state tuition for fourth year

Tax bill to impact higher education: Freeman talks NIU’s financial future

President Donald Trump speaks to reporters Oct. 13 on the South Lawn of the White House in Washington 

Associated Press

DeKALB — Acting President Lisa Freeman released a statement on Tuesday informing students of the impact of a Tax recently passed bill by the Senate.

The Tax Cut and Reform Bill (H.R. 1) was passed by a Senate vote of 51-48 on Dec. 19, signed by President Donald Trump Dec. 22 and became effective Jan. 1.

Freeman said university officials tried to inform lawmakers as they drafted the bill and influence their decisions, along with many other universities across Illinois and the rest of the country.

“NIU worked closely with other universities across Illinois and the nation to engage and inform legislators as they crafted this legislation during November and December 2017,” Freeman said in her Jan. 16 statement.

The tax code advances goals of “encouraging saving for higher education, helping students and families pay for college, and assisting with the repayment of student loans,” according to the American Council on Education. Freeman said in her statement that reaching out to lawmakers helped them understand NIU’s mission of helping students and families plan and pay for college.

“Thanks to these efforts, the final law does not eliminate a number of threatened provisions from current law that enhance the affordability of higher education for students and families,” Freeman said.

A limit on state and local tax deductions “may result in decreased state funding for public higher education institutions,” according to the American Council on Education website.

“The new limit on individual state and local income tax deductions could further complicate the state’s investment in public higher education,” Freeman said.

Freeman also said a reduction in tax incentives for donations to charity means giving up gifted money used for scholarships, research and athletics.

Freeman said there will be a period of time where the university will need to evaluate the scope of the impact this has on the university’s future.

“The full magnitude of this legislation’s impact on the university, students and their families will come into sharper focus as the details of the law are analyzed in the coming weeks and months,” Freeman said. “As always, NIU is committed to ensuring that an outstanding, affordable public education at NIU remains within reach of all Illinoisans.”

01-All No Sub,02-Pol,12-Coll,16-Econ,HE 2 Coalition,HE Blog


via – RSS Results of type article

January 18, 2018 at 06:57AM

Tax bill to impact higher education: Freeman talks NIU’s financial future

University of Illinois trustee seat has been empty a year

CHAMPAIGN — A seat on the University of Illinois Board of Trustees has been empty now for about a year.

The board is preparing to elect new officers Thursday in Chicago. But Gov. Bruce Rauner has yet to choose an appointee for the seat vacated last January, the News-Gazette reported.

“Our administration is still in the process of considering candidates for this vacancy,” said Rachel Bold, a spokeswoman for Rauner, on Tuesday.

The terms of Democrats Patricia Brown-Holmes and Ricardo Estrada and Republican and former Springfield Mayor Karen Hasara expired last January. At the time, Rauner said he hoped to fill those vacancies with “superstar” talent.

The governor appointed Democrat Donald Edwards in March and Republican Stuart King in July to fill two of those seats. Edwards is a private equity investor in Chicago and King is a Christie Clinic physician in Champaign.

The board currently has four Republicans, two Democrats and two independents. State law allows up to five of the nine trustees to be from the same political party. Three student trustees are also elected each year, and one has an official vote.

The board has been able to approve budgets, hire coaches and administrators, and conduct other matters despite the vacancy. But “we’re anxious to see the vacancy filled” to ensure quorums and a trustee presence at university events throughout Illinois, said Tim Killeen, president of the University of Illinois System.

“It’s certainly more difficult with the smaller number than it would be if it were a full complement,” Killeen said.

Killeen said he recently checked with Rauner’s staff and isn’t expecting any announcement before Thursday’s meeting.

01-All No Sub,12-Coll,02-Pol,03-HL 20,04-Pens 20,19-Legal,HE 2 Coalition,HE Blog


via News – The State Journal-Register

January 17, 2018 at 01:57PM

University of Illinois trustee seat has been empty a year

Gubernatorial Candidates Forum at Knox College

The Knox College Democrats will host a Gubernatorial Candidates Forum tomorrow.  The student group invited Daniel Biss, Bob Daiber , Tio Hardiman, and J.B Pritzker.  Pritzker can’t make it and will send Julia Stratton to speak for him. Chris Kennedy also received an invitation but won’t attend.

 Galesburg residents and Knox College students will ask the candidates questions.  

The forum will be held at Kresge Recital Hall in Knox College on Tuesay at 7 p.m.

Western Illinois University and Augustana College Democrats are co-sponsers of the Illinois Gubernatorial Candidates Forum.  

02-Pol,01-All No Sub,19-Legal,26-Delivered,12-Coll,HE Blog


via WVIK Podcasts

January 16, 2018 at 08:07AM

Gubernatorial Candidates Forum at Knox College