By Illinois News Network
SPRINGFIELD – Earnings on college savings plans are already tax exempt and now a newly negotiated contract could collectively save investors of the state’s college savings plan nearly $3.6 million a year.
That’s the estimated savings from the Illinois Treasurer who announced the deal that eliminates set-up and maintenance fees for families saving for college through the Bright Directions 529 plan.
In a news release Treasurer Mike Frerichs says the elimination of the $10 set-up fee and $3 quarterly maintenance fee means more investment dollars will go to college savings. Management fees with Union Bank will also be reduced by 43 percent.
The announcement says more than 104,000 accounts will benefit from the new terms which take effect next month. The college savings program allows investors to save for college costs without paying taxes on earnings.
