It's been a long time coming, but families enrolled in Illinois' Bright Start college savings program might get back most of $85 million that was lost when the market tanked last year.

For those just getting caught up (the full backstory is here), six states, whose 529 college-savings programs were exposed to Oppenheimer Funds' Core Bond fund, experienced heavy losses last year when the bond sank 38 percent in the fourth quarter. Billed as a one of the Wall Street company's most conservative investment strategies, Oppenheimer's then-Senior Vice President of Fixed Income Angelo Manioudakis decided to invest a chunk of the bonds in risky mortgage-backed securities. Worse yet, he heavily leveraged the fund, a move that analysts in charge of keeping tabs on Core Bond did not even notice. A few months after the housing market seized up and the value of the fund plummeted, State Treasurer Alexi Giannoulias transferred all Bright Start monies allocated to Core Bond to short-term U.S. treasury debt and began negotiating with Oppenheimer to retrieve some of the cash. In February, the state also served Oppenheimer with subpoenas under the Consumer Fraud Act. And while Giannoulias reached a "handshake deal" in June that would return $77 million to the affected Bright Start accounts, there remained one large obstacle: the state of Oregon.

Like the Prairie State, $36 million was drained from Oregon's college savings program thanks to Oppenheimer's investment decisions. As a result, Oregon's Attorney General John Kroger and Treasurer Ben Westlund sued the firm for promoting the investment plan as "conservative." Until that case was dealt with, Oppenheimer had refused to move forward with settlements in any of the five other states. Last Thursday, Oregon dropped its suit, agreeing to settle for a $20 million payment, removing a hurdle for the deal arranged by Giannoulias and Attorney General Lisa Madigan. "The news about Oregon's participation in the deal removes a critical obstacle," writes the Sun-Times Terry Savage, "that should make it easier to accelerate the process of distribution."

Unfortunately, the money won't be distributed immediately. Savage explains why:

But individuals and families shouldn't get their hopes up about getting the money in time for spring tuition bills. The funds will be distributed to an escrow account, where they must remain for at least 90 days. That would ensure that no claims against Oppenheimer could be lodged against the distribution in the event of financial problems for the management company.

So even if the funds are moved to the escrow account by year-end, they could not be assigned back to the investment accounts before early April. And that process of directing which investment accounts receive what portion of the settlement is another tangled web. Each state can create its own formula for assigning its settlement funds.

Even so, it's undoubtedly good news that the bulk of the hard-earned money Illinois families tossed into Bright Start appears likely to be saved. We also look forward to hearing a full explanation about the initial problem from Giannoulias, who was unable to explain his side of the story -- including why it took the state a few weeks to pull its share in Core Bond from the fund once it began to nosedive -- because of the ongoing negotiations.