New sales are now temporarily suspended and the program may eventually need a bail out.
"It looked like it was backed by the state. It looked pretty much like a guaranteed thing," said Jeremy Heer, College Illinois participant.
Heer isn't a casual investor. He manages portfolios for a living. Five years ago, for his daughter, he paid $45,000 to lock in the price of eight semesters of schooling via College Illinois.
"I look for words like risk and I didn't see anything in there," said Heer.
"I've seen the marketing materials that said this was a guarantee that it has the full faith and credit of the state of Illinois behind those contracts and is not subject to market fluctuations," said State Rep. Jim Durkin, (R) Western Springs.
The problem is the program is susceptible to market fluctuations. In recent years, as college tuition costs have soared, the fund's investments soured.
An actuarial report found College Illinois is currently funded at a 70-percent ratio. That's better than state pensions but if no new tuition contracts are sold the program will run out of money 11 years from now in 2022.
Jim Durkin isn't just a state rep. He also purchased the tuition plan for his 10-year-old daughter Caroline.
"We are going to make structural changes with the operation of College Illinois. I believe when we finish this we will have a better product," said Durkin.
A spokesperson for College Illinois wrote in an e-mail,"we want to come up with a solution to make sure that all prepaid tuition contracts are honored. We will work with the legislature and governor to craft a solution."
One possibility is negotiating a discounted rate at state schools, where tuition increases of 6 to 8 percent are outpacing the markets.
"I make sure my clients understand that you're basically doing what they're doing with your social security. You're relying on the government to fund your retirement. The question is what are they doing with your money?" said Peter Babich, Babich & Associates Financial Services.
Parent Jeremy Heer hedged his investment, albeit unintentionally.
"I didn't do it for the other two kids because the cash flow wasn't there. It may turn out to be a blessing in disguise," he said.
