Illinois State Treasurer Frerichs Announces Fee Reductions for College Savers
for College Savers
management fee – the fee charged by Union Bank & Trust, the
program manager for Bright Start – from 0.075% to 0.07%, a
reduction that will save college savers a combined $500,000
every year. The lower fees will help every Bright Start investor
save for college at a lower cost.
on delivering a low-cost, high-quality college savings option
for Illinois families. I’m proud of the success we’ve had in lowering
fees in 2017, 2020, and again in 2021. These fee savings
help Illinois families save more of their hardearned dollars for
their children’s educational dreams.”
College Savings plans: Bright Start and Bright Directions. This
action reduced fees by approximately 50% - including a reduction
in program management fees and underlying investment
fees, along with the elimination of any account opening or
a program management contract that ensured Illinois families
would receive additional fee reductions as they saved more
for college. Since those changes, the total amount saved for
college in IL 529 plans has increased more than 70%, from
approximately $9.6 billion to $16.9 billion. As the total assets
have increased, program management fees reductions were
achieved in 2020 and again in 2021.
most affordable college savings plans in the country. Treasurer
Frerichs’ emphasis on reducing fees for both programs has
saved families over $100 million since 2015. While lowering
prices, Treasurer Frerichs has simultaneously increased the
quality of the IL 529 College Savings plans. Since 2017, Morningstar,
an independent investment and research firm, consistently
has rated each plan among the best in the country. For
example, in 2020, Bright Start was one of only three 529 plans
in the country to be rated Gold by Morningstar.
educational dreams. Illinois families can invest in an Illinois
529 college savings plan with confidence and take advantage
of the plan’s high quality, low cost, and generous tax benefits,”
said Treasurer Frerichs.
plan. Bright Directions is a college savings plan a family can
open with the assistance of a financial advisor. Both are 529
taxadvantaged plans, meaning the investment grows tax-free
when used for qualified expenses, such as tuition, room and
board, books, and a computer. Funds saved in Bright Start
or Bright Directions can be used at thousands of colleges,
universities, trade, and technical schools across the country
were 387,000 accounts worth a total of $7.12 billion. Today,
there are 762,000 accounts worth $16.5 billion across the two
programs. Since 2015, families have used these accounts to
pay approximately $5 billion in college expenses.
college if they know they have a dedicated college savings
account. For more information, or to open an account, visit
www.illinoistreasurer.gov and click on the college savings button.
There is no account opening fee, minimum contribution,
or minimum balance.
Chief Investment and Banking Officer and actively manages
approximately $52 billion. The portfolio includes $27 billion
in state funds, $16 billion in retirement and college savings
plans and $9 billion on behalf of local and state governments.
Frerichs’ office protects consumers by safeguarding more than
$3.5 billion in unclaimed property, encouraging savings plans
for college or trade school, increasing financial education
among all ages, assisting people with disabilities save without
losing government benefits, and removing barriers to a secure
retirement. The Treasurer’s Office predates Illinois incorporation
in 1818. Voters in 1848 chose to make it an elected office.
(“Bright Start”) and the Bright Directions Advisor-Guided
529 College Savings Program (“Bright Directions”) are part of
the Illinois College Savings Pool and are designed to qualify
as qualified tuition programs under the provisions of Section
529 of the Internal Revenue Code. Bright Start and Bright
Directions are sponsored by the State of Illinois and administered by the Illinois State Treasurer, as Trustee. Union Bank & Trust Company serves as Program Manager, and Northern Trust Securities, Inc. acts as Distributor of the advisor-sold plan. Investments in Bright Start and Bright Directions are
not guaranteed or insured by the State of Illinois, the Illinois
State Treasurer, Union Bank & Trust Company, Northern
Trust Securities, Inc., the Federal Deposit Insurance Corporation, or any other entity.
risks, and charges and expenses associated with municipal
fund securities before investing. This and other important
information is contained in the fund prospectuses and the
Bright Start Program Disclosure Statement and Bright
Directions Program Disclosure Statement (issuer’s official
statement), which can be obtained from your financial
professional, on BrightStart.com, and BrightDirections.
com and should be read carefully before investing. You can
lose money by investing in a portfolio. Each of the portfolios
involves investment risks, which are described in the
Program Disclosure Statement.
the investor’s or designated beneficiary’s home state offers
any state tax or other benefits such as financial aid, scholarship
funds, and protection from creditors that are only
available for investments in such state’s 529 plan. Investors
should consult a tax advisor.
Bright Start was one of only three plans to earn a Gold
rating. Analyst ratings for 529 college savings plans consider:
Process, People, Parent, and Price. Based on their conclusions, analysts will assign pillar scores. Morningstar analysts retain discretion to override scores if they believe a unique characteristic justifies a different rating than the score suggests. The Morningstar Analyst Rating™ is a subjective evaluation and is not a credit or risk rating. The Analyst Rating scale is Gold, Silver, Bronze, Neutral, and Negative.
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