Prepaid college plans: shrinking options, rising risks

Jim and Celeste Durkin thought when they began investing six years ago in Illinois state’s prepaid college savings plan that they were locking in a bargain price if their daughter Caroline, who is now 10, eventually attended the University of Illinois.

That might not be the case. The plan took some risky bets on private equity and hedge funds and is now 30 percent underfunded and temporarily closed to new investments.

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