College Savings Options
With so many ways to save for college, there’s a lot of information out there. View the comparison chart below to see how the Bright Start Direct-Sold College Savings Program stacks up against other options.
Coverdell Education Savings Account (ESA)
UGMA / UTMA
$2,000 per beneficiary per year
$450,000 maximum account balance1
Illinois state income tax-deductible contributions
Change of beneficiary allowed
What a 529 Plan Means for Financial Aid
NOTE: The eligibility of the Beneficiary for financial aid may depend on the circumstances of the Beneficiary’s family at the time the Beneficiary enrolls in an Institution of Higher Education, as well as on the policies of the governmental agencies, school, or private organizations to which the Beneficiary and/or the Beneficiary’s family applies for financial assistance. Because saving for college will increase the financial resources available to the Beneficiary and the Beneficiary’s family, it most likely will have some effect on the Beneficiary’s eligibility. These policies vary at different institutions and can change over time. Therefore, no person or entity can say with certainty how the federal aid programs, or the school to which the Beneficiary applies, will treat your Account.
1 The combined maximum account balance limit for limit for the Bright Start Direct-Sold College Savings Program and all other Section 529 programs established and maintained by the State of Illinois for a particular beneficiary cannot exceed $450,000. Although account balances can grow beyond that amount, no additional contributions can be made once the balance reaches $450,000.back
2 An individual who files an individual Illinois state income tax return will be able to deduct up to $10,000 per tax year (up to $20,000 for married taxpayers filing a joint Illinois state income tax return) for their total, combined contributions to the Bright Start College Savings Program, the Bright Directions Advisor-Guided 529 College Savings Program, and CollegeIllinois! during that tax year. The $10,000 (individual) and $20,000 (joint) limit on deductions will apply to total contributions made without regard to whether the contributions are made to a single account or more than one account. The amount of any deduction previously taken for Illinois income tax purposes is added back to Illinois taxable income in the event an Account Owner takes a Nonqualified Withdrawal from an Account or if such assets are rolled over to a non-Illinois 529 plan. If Illinois tax rates have increased since the original contribution, the additional tax liability may exceed the tax savings from the deduction.back
3 Contributions can be made for a beneficiary from birth to age 18. The account may remain open until the beneficiary reaches age 30, with certain limitations.back
4 Custodianship typically terminates when a minor reaches age 18 or 21.back
5 ESA eligibility phases out at $95,000–$110,000 adjusted gross income ($190,000– $220,000 for joint filers). Please check with your tax advisor for details and information regarding your specific situation.back