The Brightstart college savings program will see its most important changes as new management takes over. These changes will benefit families who save for education expenses, especially when you have reduced fees that keep more money invested and help stimulate college savings growth.
Parents can start investing in their child’s education through the Bright Start Direct-Sold College Savings Program with any amount that works for their budget. On top of that, Illinois residents get great tax benefits. Couples can deduct up to $20,000 each year for 529 contributions—one of the highest deduction limits in the country. Single filers can deduct $10,000 yearly per beneficiary.
The Bright Start 529 College Savings stands out with its diverse investment options. Age-based portfolios automatically adjust their asset allocation to become more conservative as your child gets closer to college. The expense ratios now range from about 0.10% to 0.81%, with recent updates lowering these fees. Account holders can keep contributing until all account balances hit $500,000 for the same beneficiary.
This piece covers the recent Bright Start program updates, their impact on current account holders, and ways to boost your benefits with the new management and fee structure.
Bright Start Direct-Sold College Savings Program
The Bright Start 529 College Savings Program enters a new phase with major administrative changes that will benefit Illinois families saving for education. These updates will strengthen the program’s foundation and provide better services to account holders.
New program manager and what it all means
The Illinois State Treasurer’s Office has picked a new program manager for the Bright Start Direct-Sold College Savings Program. This change brings more than just administrative updates – account holders will see better investment options and lower fees.
The new management will modernize Bright Start while keeping the tax benefits that make 529 plans attractive to Illinois residents. Account holders will get better digital tools, simpler account management, and more investment choices. The change will lead to lower expense ratios for investment options of all types, so more of each contribution goes toward future education expenses.
Transition timeline and key dates
The switch to new management follows a careful timeline to minimize disruption. The new program manager takes full control on September 25, 2024.
Current account holders will get transition updates about needed actions before this date. These updates usually start 60-90 days before the switch, which gives everyone enough time to prepare.
Key pre-transition dates include deadlines for pending transactions and final dates to make changes in the current system. Account holders should look for emails and letters with specific instructions about required actions and deadlines.
Temporary service disruptions to expect
Account holders should plan for some temporary service limits during the transition. A blackout period will last about 1-2 weeks around the changeover date when certain account features won’t work.
During this blackout, account holders won’t be able to make contributions, withdrawals, or investment changes. Online access might not work while systems move to the new platform. Automatic contributions should keep running, but account holders should check this after the transition.
The short-term hassles won’t outweigh the long-term benefits of lower fees and better services for most Bright Start participants.
Lower Fees and Updated Investment Options
The recent changes to the Bright Start Direct-Sold College Savings Program bring two major benefits to Illinois families saving for education. Families will pay lower fees and have better investment options.
Fee structure before and after the change
Account holders will see good news in their wallets as total average asset weighted fees drop by 13 percent. This cut adds to the more than $100 million that Illinois State Treasurer Michael Frerichs has already saved for Illinois 529 account owners.
Bright Start 529’s expenses rank among the nation’s lowest, at less than half the national average for 529 plans. The total yearly asset-based expense ratio runs from 0.06% to 0.77%, and the Principal Plus Interest Portfolio has no charges. Account holders don’t pay sales charges, startup fees, or maintenance fees. This makes Bright Start one of the most economical college savings options available.
New investment menu overview
The biggest change to the investment structure moves from the current Age-Based Portfolio system to an Enrollment Year Portfolio structure. This change creates smoother portfolio rebalancing and gives investors a better experience.
The new structure links portfolios to the future student’s enrollment year instead of their age. This setup gives more options to match different investment goals and risk comfort levels. The new menu has:
- Aggressive Enrollment Year Portfolios
- Moderate Enrollment Year Portfolios
- Aggressive Active Blend Enrollment Year Portfolios
- Moderate Active Blend Enrollment Year Portfolios
Each category offers multiple portfolio options with different fees and risk levels. Families can pick the approach that fits their needs best.
How to reassess your portfolio
After the transition, your account will move to an investment allocation that closely matches your current plan. This gives you a great chance to look at your investment strategy again.
Account owners keep full control over their college savings investments. You can choose from Bright Start 529 Investment Portfolios of all types with different strategies and risk levels. Each time you contribute, you can pick any available portfolio.
Take time to review your investment choices with the new Enrollment Year Portfolio structure. This approach matches investments to when you’ll need the funds rather than just looking at the beneficiary’s age. It might give you a better strategy for your education timeline.
Modern Tools for Managing Your Bright Start 529 College Savings
The Bright Start 529 College Savings Program will upgrade its technology platform completely. The new system replaces legacy interfaces with optimized, accessible account management tools.
Re-establishing online access
Account holders need to set up their online access again through a verification process starting September 30, 2024. Here’s how to regain access:
- Visit BrightStart.com and click the Log In button in the top-right corner
- Verify your identity using your Social Security Number (SSN) or Individual Tax Identification Number (ITIN)
- Provide your date of birth and ZIP code to complete verification
The website must handle your original account setup—not the mobile app.
Using the READYSAVE™ 529 app
The READYSAVE™ 529 app becomes available after you re-establish online access. This mobile solution makes shared account management possible for Bright Start 529 College Savings accounts. You can select the Illinois Bright Start 529 tile and log in with your new username and password.
Switching to Ugift® for gifting
Ugift® takes over from the GiftED platform during this transition. This secure, free system helps you ask friends and family for gift contributions easily. Once your online access works:
- Select the Ugift link from the “My Accounts” page
- Receive a unique Ugift code for each account
- Share your code through email, social media, or printed invitations
Your contributors can use this code at Ugift529.com anytime.
What These Changes Mean for Your College Savings Strategy
The Bright Start 529 College Savings Program’s latest updates substantially improve its ability to build wealth for education expenses. Account holders should plan their next steps carefully.
Impact on long-term growth
Your college savings grow stronger with lower fees. Bright Start’s expense ratios rank among the nation’s lowest at just 0.24%, while the national average for 529 plans sits at 0.51%. So, your invested dollars work harder, creating a compound effect that builds over decades. A mere 0.1% reduction in fees could add thousands to your education funding throughout your child’s growing years.
Adjusting your contribution strategy
Illinois taxpayers receive valuable tax benefits with Bright Start, including:
- State income tax deductions up to $10,000 annually if you have single filing status and $20,000 for joint filers
- Your investments grow tax-free with qualified education expenses
- 529 assets receive better financial aid treatment, counted at roughly 5% in aid calculations versus 20% for student-owned assets
Automatic contributions through bank transfers or payroll direct deposit help build consistent saving habits. You might want to increase your contributions during tax years that need additional deductions.
Getting professional advice
A financial advisor’s expertise proves valuable if the new enrollment-based portfolio structure leaves you uncertain. They can help create the best strategy based on your risk tolerance, timeline, and the expanded 529 plan options for apprenticeship programs and loan repayments.
Summary
The Bright Start College Savings Program’s upcoming changes are a chance for Illinois families to better plan their children’s education expenses. The 13 percent fee reduction stands out as the most valuable improvement. This becomes even more impactful over the long-term investment horizon that college savings plans typically need. Account holders will see more of their money work toward educational goals instead of administrative costs.
The new Enrollment Year Portfolio structure gives a better way to manage investments. It automatically adjusts risk as the enrollment date gets closer. This smart redesign takes away the need to manually adjust portfolios and could lead to better investment results.
The long-term benefits outweigh any short-term hassles during the transition period. Families should note September 25, 2024, on their calendars. They can start using online access again from September 30.
Illinois residents’ tax advantages stay the same – and that’s great news. Couples can still deduct up to $20,000 each year from state income taxes, while individuals get up to $10,000. These tax benefits, plus lower fees and better investment options, make Bright Start one of the most economical solutions for college savings across the country.
Current program users should take time to look at their contribution strategies and investment mix again. People who haven’t started saving for college might find this improved program the perfect time to begin. The revamped Bright Start program gives education savers exactly what they need – lower costs, better tools, and more room for growth as kids get closer to college age.
