CHICAGO — Illinois is making changes to its Bright Start college savings plan, state treasurer Michael Frerichs announced Thursday.
The changes coincide with a change in the program manager from Union Bank & Trust Company to TIAA-CREF Tuition Financing and are intended to offer parents saving for their child’s college tuition reduced fees and an improved user experience.
Here are five things to know about the changes:
Parents will need to re-establish online accounts and update payroll deductions
TIAA officially takes over as program manager on Sept. 30, but the transition will begin at 3 p.m. on Sept. 25. During the transition 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. Parents will need to re-establish their online account access at BrightStart.com or via the new Bright Start 529 mobile app, and they’ll need to update payroll instructions with employers.
The state is offering new digital account experiences
The BrightStart.com website is getting a refreshed design. A new Bright Start 529 mobile app will allow account owners to manage accounts, check balances, and open additional accounts for new beneficiaries. The state says the account opening process will be quicker, and sending money directly to colleges will be easier and faster.
The state says the new plan will save parents money
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.
Investment structures are changing
The significant investment lineup enhancement will be the transition from the current Age-Based Portfolio structure to an Enrollment Year Portfolio structure, which the state says will allow for a better investor experience due to the gradual rebalancing of the investment portfolios. The Enrollment Year Portfolios are intended to 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.
University of Illinois & Northern Illinois University will waive certain late fees
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. Frerichs said the University of Illinois and Northern Illinois University will waive any late fees and tuition paid with Bright Start accounts during the transition period.