Governor Announces Sale of Illinois College Savings Bonds to Help Families Plan for Higher Education Costs

SPRINGFIELD -- Governor George H. Ryan today announced that Illinois College Savings Bonds with a total maturity value of $140 million will be offered for sale in late September through brokerage firms across the state.

"Illinois College Savings Bonds are an excellent investment option for families who want to plan ahead and invest in their children's college education," Ryan said.

"In addition to being double tax exempt, College Savings Bonds benefit investors by providing a cash bonus when the proceeds are used for educational expenses at an Illinois college or university."

Illinois College Savings Bonds are zero-coupon bonds. Individual bonds will be offered at discounted prices that are estimated to range from $1,600 for a 21-year bond to $4,375 for a three-year bond, depending on market conditions at the time of the sale. Each bond will pay $5,000 at maturity.

Illinois College Savings Bonds are exempt from federal and Illinois income taxes, and the purchase of up to $25,000 in bonds will not reduce eligibility for certain state assistance and loan programs.

PaineWebber Incorporated and First Union Securities are the senior underwriters for the sale. Other underwriters include A.G. Edwards and Sons, Inc.; Morgan Stanley Dean Witter; Merrill Lynch & Co.; Edward Jones; Harris Trust & Savings Bank; Fidelity Capital Markets; Banc One Capital Markets, Inc.; Dain Rauscher; LaSalle Capital Markets; and Prudential Securities.

Illinois College Savings Bonds are available from these underwriters at their offices in more than 500 Illinois communities and also may be available from other brokerage firms.

Persons who use bond payments to pay for higher education in Illinois may receive a bonus from the Illinois Student Assistance Commission. If the monies are used to fund higher education expenses at an Illinois college or university, the bonds at maturity pay a bonus ranging from about $60 to $420 per bond, depending on the maturity date.