Budget & Finance

College-Fund Loss Draws Oregon Ire

By The Associated Press — April 20, 2009 1 min read
  • Save to favorites
  • Print

Oregon officials—stung by steep losses in the Oregon College Savings Plan—are seeking $36.2 million in damages from OppenheimerFunds Inc., which managed a fund responsible for those losses.

The lawsuit filed, in Marion County, Ore., against the Denver-based OppenheimerFunds, includes allegations of negligence, breach of contract, and violations of state securities laws. Officials said in a statement that risky, “hedge-fund like” investments cost the Oppenheimer Core Bond Fund 36 percent of its value last year—and 10 percent more so far this year.

Meanwhile, comparable funds in a benchmark index posted a gain of about 5 percent for 2008, they said.

Oppenheimer officials said the accusations are unfair and lack merit.

James Sinks, a spokesman for state Treasurer Ben Westlund, said about 66,000 accounts were affected. The five-member board that oversees the Oregon College Savings Plan decided in January to withdraw from the bond fund.

“Families were doing the right thing and saving for college,” Mr. Westlund said in a statement, “but unknown to them or Oregon, their money was invested in ways that were plainly inappropriate for those saving for college or already in college.”

Mr. Westlund and Oregon Attorney General John Kroger said Oregon is the first state to take legal action against OppenheimerFunds for losses in college-savings programs.

The company also manages 529 plans for a handful of other states, said Justin Draeger, a vice president of the National Association of Student Financial Aid Administrators, in Washington.

Still, he said, the situation in Oregon shouldn’t discourage families from taking advantage of state college-savings plans.

“Right now, this appears to be isolated; it doesn’t appear to be systemic or widespread,” Mr. Draeger said. “Generally, 529 plans are a great investment vehicle to save for college.”

Related Tags:

Education Week Staff Writer Alyson Klein contributed to this column.
A version of this article appeared in the April 22, 2009 edition of Education Week


This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Classroom Technology Webinar
Seamless Integrations for Engagement in the Classroom
Learn how to seamlessly integrate new technologies into your classroom to support student engagement. 
Content provided by GoGuardian
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Recruitment & Retention Webinar
Be the Change: Strategies to Make Year-Round Hiring Happen
Learn how to leverage actionable insights to diversify your recruiting efforts and successfully deploy a year-round recruiting plan.
Content provided by Frontline
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Equity & Diversity Webinar
Critical Ways Leaders Can Build a Culture of Belonging and Achievement
Explore innovative practices for using technology to build an environment of belonging and achievement for all staff and students.
Content provided by DreamBox Learning

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Budget & Finance What It Takes to Stay on Top of Improving School Facilities
Be proactive, especially with winning community support, district leaders advise.
4 min read
Architectural rendering of a school.
Budget & Finance Districts Spend Up to a Third of Their Payroll on Pensions. What That Means for Budgets
Despite healthy returns in 2021, some districts' share of retirement benefits and debt servicing has crept up to high levels.
5 min read
Image of a calculator and fincancial visuals.
iStock/Getty collage
Budget & Finance Teachers Take to Twitter to Crowdfund Classroom Supplies
Teacher wish lists posted under the hashtags #Clearthelists and #Adoptateacher are trending on Twitter.
3 min read
Image of supplies for the classroom.
Jianbi Chen/iStock/Getty
Budget & Finance From Our Research Center Despite Accusations of Hoarding, Districts Say They're Steadily Spending ESSER Funds
More than half of district leaders say they've spent more than three-quarters of their federal relief.
3 min read
Little businessman holding scissors to cut money bag held by a giant hand
iStock/Getty Images Plus