529 Plan Comparison

As shown in the following 529 plan comparison chart, Bright Start is a good college savings plan if you desire both flexibility and control.

Bright Start vs. Other Education Savings Options.

Bright Start vs. Other Education Savings Options
Features Bright Start College
Savings Program
Coverdell Education
Savings Account
UGMA/UTMA Account
Beneficiary Age Limit NoneCan contribute until child reaches 18. Must spend assets by child’s 30th birthday18 or 21, depending on state law
Account Owner Income Limit NonePhases out for incomes between $95,000 and $110,000 if single, $190,000 and $220,000 if marriedNone
Federal Tax Exemption For qualified withdrawalsFor qualified withdrawalsNone
State Tax Exemption For Illinois residents for qualified withdrawalsNoneNone
State Tax Deduction For Illinois residents, up to $10,000 if single, $20,000 if married, per yearnonenone
Contribution Limit $350,000 per child1$2,000 per year2None
Account Control Parent/account ownerParent/account ownerChild assumes control at legal age of majority
Beneficiary Flexibility Flexible beneficiary designationFlexible beneficiary designationMay not be transferred
Financial Aid Impact Considered account owner’s assetsConsidered account owner’s assetsConsidered student’s assets
Asset Use Can be used for a broad range of higher education expenses, including tuition fees, books, supplies equipment and room and boardCan be applied to elementary, secondary and higher education expenses, including tuition fees, books, supplies equipment and room and boardUnrestricted, provided it is for the benefit of the minor
Gift Tax Treatment May contribute up to $14,000 ($28,000 for married couples) per child, or a combined five-year gift of up to $70,000 ($140,000 for married couples)2May contribute $2,000 per year per child without gift taxMay contribute $14,000 per year per child without gift tax
Estate Tax Treatment Considered removed from donor’s estate (partial inclusion if donor dies during the five-year election period)Considered removed from donor’s estateConsidered removed from donor’s estate
Investment Flexibility Yes3YesYes

1. All assets, including earnings, under all accounts in all other Section 529 plans established and maintained by the state of Illinois for the benefit of a particular beneficiary must be aggregated when applying this limit. New contributions will not be allowed once this limit is reached. Earnings, however, will continue to accrue. Consult your tax advisor for information on how 529 tax treatment would apply to your particular situation.

2. Non-Account Owners have no control over contributions. Only Account Owners may direct transfers, rollovers, withdrawals, investment changes and changes in the Designated Beneficiary.

3. You may adjust your allocations for money previously invested only once per calendar year, but you may allocate new contributions among any combination of available investment options.