College Savings

An Illinois 529 plan is a college savings account that helps families save for future education costs. The money in the account can be invested, and it can offer federal and Illinois tax advantages when used for qualified education expenses. According to Washington University’s Center for Social Development, children who know they have a college savings account are approximately three times more likely to attend college or other post-secondary training. Illinois 529 plans offer a diverse lineup of investment options. You can choose investments that fit your goals and comfort level.

Illinois 529 Programs

Illinois families can save for college with confidence through the Illinois Treasurer’s Office. Treasurer Michael W. Frerichs oversees two top-quality 529 plans—Bright Start and Bright Directions—with flexible options to fit your needs. Eligible children can also get a head start through Illinois First Steps, which provides a $50 seed deposit to help jump-start college savings and can be claimed through Bright Start or Bright Directions.

Illinois First Steps

Illinois First Steps helps families jump-start their college savings with a $50 seed deposit. Children born or adopted on or after January 1, 2023, whose parent or legal guardian is an Illinois resident at the time of birth or adoption. Funds can be used for future college, technical school, or apprenticeship education expenses. Visit Illinois First Steps for program details and step-by-step instructions to claim the $50 seed deposit for your eligible child.

Bright Start 529 College Savings

Bright Start is a direct plan that individuals can sign up for and manage themselves. Families can open a Bright Start account by visiting BrightStart.com. The Bright Start website will help you learn the basics of a 529 college savings account and provide additional resources and tools so you can start saving for your child’s future today. Opening a Bright Start account online usually takes about 10 minutes.

Bright Directions Advisor-Guided 529 College Savings

Bright Directions is a plan available through a financial advisor. To open a Bright Directions account, you must work directly with your preferred investment advisor. Visit BrightDirections.com to learn more about the investment options and to explore Bright Directions’ extensive college planning tools.

Benefits of Saving with an Illinois 529 Plan

The Illinois 529 college savings plans allow families to save for the future cost of college while taking advantage of federal and state tax benefits, a diverse lineup of investments, and low fees. Treasurer Frerichs has worked hard to ensure the IL 529 plans are:

  • Affordable: No minimum contribution or balance. You can open an account with $1. Bright Start is among the lowest-cost 529 plans in the country, and Bright Directions is among the lowest-cost advisor-sold plans.
  • Accessible: Any adult age 18+ with a SSN or ITIN and a mailing address can open an account. Opening a Bright Start account online takes approximately 10 minutes.
  • Tax savings:  Contributions are tax-deductible for Illinois taxpayers (up to $10,000 for individuals and $20,000 for joint filers), and investments grow tax-free while in the plan.
  • Versatile Spending: Pay for a variety of qualified higher education expenses, including tuition and fees; room and board (for those enrolled at least ½ time); books, supplies; computer and required software; special needs services for a special needs beneficiary; apprenticeship program expenses; and repayment of qualified education loans. 
     

Bright Start’s Tax Benefits Help Families Save More

  • Investment Diversity: Families choose from a diverse range of investment options to match their own time horizon and risk tolerance. 

Effect of Saving $100 a Month for 18 Years in a Taxable vs. Tax-Deferred Account.

Benefit of Long-term College Savings

Hypothetical example with an initial investment of $2,500.

*This hypothetical example illustrates the accumulation potential with a $2,500 initial investment and a monthly contribution plan at a 5% projected average annual return. The above example is based on projections and does not reflect your actual investment in the Bright Start Direct-Sold College Savings Program or Bright Directions Advisor-Guided College Savings Program. If fees were included, the return would be lower. Your actual results may be more or less.

To learn about each plan, visit BrightStart.com or BrightDirections.com. You can also email collegesavings@illinoistreasurer.gov. We have bilingual staff ready to answer any questions you may have.