April 28, 2008

With college costs outpacing inflation, Illinois State Treasurer Alexi Giannoulias is committing $3.5 million in scholarships to Illinois students, including $2.8 million in need-based grants that he announced today.

Treasurer Giannoulias with Roosevelt University’s Outreach Director Lisa Encarnarcion; Junior Ebony Palmore; Sophomore Jessica Salazar; President Dr. Chuck Middleton; Sophomore Lindsey Haase and Financial Aid Director Constance Jackson. The staff and students accepted the scholarship donation on behalf of Roosevelt University.

The Illinois State Treasurer’s Bright Start Scholarship Program comes at no cost to the state or taxpayers, Giannoulias said. The awards will be dispersed directly by schools to Illinois students and funded entirely by OppenheimerFunds, the program manager for Illinois’ 529 college savings plan.

“This is an unprecedented private-public partnership that will benefit needy Illinois students,” Giannoulias said. “No other states and college savings fund managers are providing this much money to students with so few strings attached.”

Through the Illinois State Treasurer’s Bright Start Scholarship Program, Giannoulias will distribute $400,000 in scholarships to four-year public and private universities in Illinois each of the next seven years. Schools must have an undergraduate enrollment above 2,000 to qualify, and allotments will be calculated annually based on the school’s tuition, room and board.

Schools will select recipients based on need, and the scholarship amounts will range from $1,000 to $2,500. Up to 400 scholarships will be awarded annually and up to almost 3,000 will be given out to Illinois students through the life of the program.

Giannoulias with University of Illinois at Chicago Financial Aid Director Tim Opgenorth and Senior Latasha Jones.

“Working together with Illinois universities and colleges to help our state’s neediest students is a major priority for this office,” Giannoulias said. “Every year it costs significantly more to attend college, and this money will give thousands of students in Illinois a boost toward earning that degree.”

The Treasurer’s Office will give the cash to the schools to avoid spending scholarship money on staff and administrative costs and to eliminate any potential for impropriety or even the appearance that the scholarships could be awarded to unqualified students. State Treasurer’s Office employees and their immediate family members are not eligible for these scholarships. Recipients do not need to be Bright Start participants.

“We believe that all Illinois students should have the opportunity to attend college,” said Raquel Granahan, senior vice president and director of college savings plans at OppenheimerFunds, Inc. “We are committed to helping the Treasurer’s Office achieve that by offering a high-quality 529 plan, and also by participating in this scholarship program.”

No state funds or taxpayer money will be used to fund or administer scholarships. OppenheimerFunds agreed to provide $3.5 million in scholarships for Illinois students after Giannoulias negotiated a new Bright Start contract with the fund manager last year. Bright Start was recently named one of the top five college savings programs in the country by Morningstar, Inc.

“Treasurer Giannoulias did a phenomenal job negotiating these scholarships for students,” said Al Grace, founder of Loop Capital Markets and a Bright Start advisory board member. “By negotiating these scholarships after the 529 plan’s fees and costs were established, they come at no cost to the state or investors, and the value of these scholarships is magnified during these tough economic times.”

These scholarships come at a time when college is considered less affordable than a decade ago, according to the Illinois Student Assistance Commission (ISAC).

Tuition and fee increases at Illinois’ public and private colleges and universities have outpaced other economic indicators, including the Consumer Price Index, Illinoisans’ per capita disposable income and General Funds appropriations for higher education between 1996 and 2006, according to ISAC. Public costs increased 116 percent and private costs went up 72 percent in the time period, while CPI, for instance, increased less than 29 percent.

“This scholarship money will help hundreds of talented and deserving students achieve their dream of earning a college education,” said Chuck Middleton, president of Roosevelt University. “I want to thank Treasurer Giannoulias for this forward looking initiative. It will benefit both the students who need financial assistance and the State of Illinois, which will have more highly educated citizens.”

Starting this year, approximately $200,000 will be distributed among 12 public universities in Illinois, and the same amount will be dispersed among private universities with undergraduate enrollments of 2,000 or more. Each award amount is proportional, based on the total cost of going to the particular school.

For example, according to the Illinois Board of Higher Education, the total cost for tuition, room and board in 2006-07 at the University of Illinois at Chicago was $18,224. The total cost for all 12 public schools on the list in fiscal year 2007 was $161,368. Therefore, UIC’s total cost was about 11 percent of the total cost of all the public universities. Eleven percent of the $200,000 award amount is $22,500 rounded to the nearest $500.

"Whenever the university receives additional assistance for their students, it is extremely welcomed," said Tim Opgenorth, director of financial aid at the University of Illinois at Chicago. "Of our undergraduate students, roughly one third receives Pell Grants, which are federal grants for the neediest students. So there is a great need for additional funds to assist our students, and the new Bright Start Scholarship Program will enable us to meet the needs of a few more needy students who attend UIC."

The Treasurer’s Office expects to announce the first recipients of the scholarships this fall.

Yolanda Beamon, a senior majoring in political studies at the University of Illinois at Springfield, said students will welcome another scholarship opportunity.

“There is a lot of financial aid available, but sometimes the maximum amount you can take out in loans isn’t even enough,” Beamon said. “Sometimes these scholarships can be the difference of whether or not a student can even go to college.”

A list of the participating colleges and universities and award amounts is attached.

For more information on the state’s Bright Start Savings Program visit www.brightstartsavings.com.