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September 12, 2024 – Families with a Bright Start College Savings Program (Bright Start 529) will soon pay lower fees, gain access to low-cost, high-quality investments, and manage their accounts on a new phone app, Illinois State Treasurer Michael Frerichs announced Thursday.
“We worked to ensure that more of a family’s hard-earned savings goes toward the cost of college or a vocational school,” Frerichs said. “I am a firm believer in continuous improvement, especially for a program as crucial to Illinois families as college savings. One of my proudest accomplishments as State Treasurer has been taking a troubled program and transforming it into one of the nation’s best. I’m excited to announce today that we are making it even better.”
The changes will go into effect September 30 as TIAA, one of the largest and most widely recognized program managers of 529 college savings plans, takes over as Bright Start 529 program manager.
“Access to higher education is one of the keys to unlocking long-term economic opportunity for Americans and we believe this relationship with Illinois will help more people to plan, save, and pay for college expenses,” said David Nason, Chief Operating Officer of TIAA and President of TIAA Wealth Management. “The 529 marketplace is dynamic, and it is essential we provide college savers in Illinois the tools and information they need as they plan and prepare to pay for these expenses with confidence.”
Bright Start 529 already is among the lowest-cost 529 savings plans in the country. To help Bright Start 529 families keep more of their money to pay for rising college costs, total average asset-weighted fees will be reduced by 13 percent. That’s on top of the more than $100 million in fee reductions Frerichs has previously saved Illinois 529 account owners.
In addition, better technology will significantly improve the user experience. A new Bright Start 529 mobile app will allow account owners to manage their account, check balances, and open additional accounts for new beneficiaries on their phones. The account opening process will be quicker, and it will be easier and faster to send money directly to colleges. Illinois parents (and legal guardians) will now be able to claim their one-time Illinois First Steps $50 seed deposit online when they open a Bright Start 529 account (for a child born or adopted on January 1, 2023 or later) – no more paper forms. Visitors to BrightStart.com will find a refreshed award-winning website design.
Bright Start 529’s low-cost investment approach will remain in place. The significant investment lineup enhancement will be the transition from the current Age-Based Portfolio structure to an Enrollment Year Portfolio structure, allowing for a better investor experience due to the gradual rebalancing of the investment portfolios. The Enrollment Year Portfolios offer more flexibility to meet varying investment objectives, risk profiles, and an investment time horizon tied to the future student’s year of enrollment or use instead of their age. Account owners remain in control of how they invest their college savings and can continue to choose options that closely align with their investment objectives and risk tolerance.
More Bright Start 529 business will be handled by Illinois-based companies, including Nuveen as investment partner, and Razorfish and Purple Group as marketing firms.
The transition will occur from 3 p.m. Wednesday, September 25 through Sunday, September 29. During that time, no withdrawals, contributions, or account changes will be processed. Account access and the ability to make transactions will resume at 7 a.m. Monday, September 30.
Bright Start 529 officials have long recommended that account holders withdraw funds 10 days before tuition is due, and for the fall semester they are recommending that parents do so by September 18. The tuition deadline for students at the University of Illinois and Northern Illinois University is Saturday, September 28.
After the transition is complete, parents will need to re-establish their online account access on brightstart.com and will need to update payroll instructions with their employer. To build awareness of the transition, Bright Start 529 has sent account owners numerous emails and mailers about the upcoming changes. All transition communications are posted at BrightStartEnhancements.com.
