Illinois Treasurer Michael Frerichs Launches Universal ‘First Steps’ College Savings Program

 

Illinois Treasurer Michael Frerichs Launches Universal ‘First Steps’ College Savings Program 

Parents of Newborns Can Claim $50 Deposit with IL College Savings Plans 

SPRINGFIELD – State Treasurer Michael Frerichs encourages new parents to open a Bright Start or Bright Directions college savings account and claim their $50 seed deposit from the new Illinois First Steps program. 

“Illinois First Steps helps place families on a path to start planning early for their child’s education,” Frerichs said. “Saving now means money for the child’s future university, community college, trade school, or apprenticeship will be available when that child is ready to pursue additional education or training.” 

To qualify for the $50 seed deposit, parents or legal guardians must be Illinois residents at the time of birth or adoption, the beneficiary child must be born or adopted after Jan. 1, 2023, open a 529 college savings account with Bright Start or Bright Directions, and a claim the seed deposit before the child's 10th birthday. 

Parents can easily open a Bright Start account at brightstart.com and submit a claim for the $50 First Steps seed deposit during the enrollment process. Parents who already have a Bright Start account for their eligible child can go to brightstart.com/first-steps/claim/ to submit a claim. Bright Start is accessible and affordable, with no minimum contribution, minimum balance, or annual fee. Parents who prefer to work with a financial advisor can claim their $50 deposit by visiting the Bright Directions website, https://brightdirections.com/first-steps/. Additionally, Bright Start and Bright Directions offer tax benefits for Illinois taxpayers. 

Treasurer Frerichs encourages families to open an Illinois 529 College Savings account. The $50 seed deposit is a great place to start, but it is only the beginning of a parent’s college savings journey. College costs have risen more than 134% during the past 20 years. Saving early gives parents more time to set aside money. A Washington University study found that having any amount of money put away in a dedicated college savings account increases the likelihood of a child pursuing education after high school. 

Rachel Hermes of Chicago’s Portage Park neighborhood applied for the First Steps money while signing up for a Bright Start account for her son, Basil, who was born in March. 

State lawmakers approved the college savings incentive in 2019. Last year, they set aside $2.5 million to start the program. 

The State Treasurer’s Office coined the name Illinois First Steps and has been carefully planning to launch the program this year. 

The Treasurer’s Office is promoting First Steps by sending postcards and letters to Illinois parents who had a baby on or after January 1, 2023, educating financial advisors, going out to community events, and working with community-based organizations throughout the state. 

Advocacy groups, which have been working on the college savings issue for years, praised the launch of First Steps. 

Bright Start and Bright Directions are the State Treasurer’s Office’s highly rated 529 college savings programs. Money in a 529 college savings account can be used at eligible educational institutions, including public and private, two-year, four-year colleges and universities, and certain technical and vocational schools. The investment grows tax-free when spent on qualified expenses. 

Treasurer Frerichs has worked to reduce fees and ensure more investment dollars go directly to college savings. These changes have helped the plans grow from $7 billion in assets in 2015 to over $17 billion in assets today. 

A list of Frequently Asked Questions about Illinois First Steps is at brightstart.com/first-steps. 

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