Act now to redeem state college bonds
BY TERRY SAVAGE Personal Finance Columnist/ firstname.lastname@example.org Aug 3, 2007
Updated: May 3, 2013 12:14PM
If you purchased Illinois College Savings Bonds when they were offered in 1998 through 2002, you might be entitled to a bonus. But you'll have to act quickly, because the bonus money is limited.
Illinois sold more than $2 billion in College Savings Bonds from 1998 to 2002. Each $5,000 bond was sold at a discount, like a U.S. Savings Bond. Interest would accrue tax-free over the years, and when the bonds matured on Aug. 1 each year, they were each be worth the full $5,000 face value.
And the bonds had an extra "kicker" -- a promised "bonus payment" of $20 per year for each year the bond was held. But the bonus would be paid only if the proceeds from the bonds were used to pay for higher education costs at an eligible Illinois institution.
It's called the Bonus Incentive Grant program.
In the early years, anyone who applied for the bonus and had certification from an in-state college, was sent a check for the bonus amount. But starting in 2004, the General Assembly failed to appropriate enough money to pay all the promised bonus money.
The Illinois Student Assistance Commission, which administers the BIG program, decided to make bonus payments on a first-come, first-served basis. If an applicant did not receive payment in the year the bonds matured, they'd have a one-time opportunity to apply again the following year.
Last year, only $650,000 was allocated for the BIG program. So ISAC was able to fund only 947 out of 1,372 applications for bonus payments, resulting in an estimated shortfall of $250,000.
Given the current situation with the state budget, there's almost certain to be a shortfall again this year -- even as claims grow because longer-held bonds should get a bigger bonus check.
If you hold an Illinois College Savings Bond that matured Wednesday, (or if you did not receive the bonus on bonds that matured last year), you should print out the application for the bonus grant from the ISAC Web site, www.CollegeZone.com.
Or you can contact ISAC at (800) 899-4722 to speak to a counselor who will mail the application to you.
Portions of the application must be completed by both the bondholder and the student beneficiary.
Then the college registrar must certify that the student is accepted for at least half-time enrollment. The sooner you complete the application, the better your chances for getting a check.