Set up a scholarship account with Bright Start 529

When you contribute to a Bright Start 529 Plan account, any earnings are federal and Illinois income tax-deferred until withdrawn. Then withdrawals used to pay for qualified education expenses are federal tax-free. State tax treatment of withdrawals is determined by the state where you file state income tax.

See FAQ "What are qualified higher education expenses?"

Bright Start 529 offers a variety of investment portfolios to fit your life situation, risk tolerance and savings goals. These vary in investment strategy and degree of risk, allowing you to select a portfolio or combination of portfolios that fit your needs and savings goals.

To compare our Bright Start 529 Investment Portfolios, visit our investment comparison page. For more information on the investment objectives, risks, charges and expenses, read the Plan Description.

No. Your Bright Start 529 funds can be used at any eligible university in the country—and even some abroad. This includes public and private colleges and universities, apprenticeships, community colleges, graduate schools and professional schools.¹ For Federal tax purposes qualified higher education expenses include postsecondary credentialing expenses and up to $20,000 annually for K-12 expenses (per student).¹ In addition, your 529 can be used for student loan repayment up a $10,000 lifetime limit per individual.¹ Review a list of qualifying expenses and the state tax treatment of withdrawals for these expenses in the Plan Description.

Footnotes

1. ¹Withdrawals for postsecondary credentialing expenses and K-12 expenses can be withdrawn free from federal tax. For Illinois taxpayers, these withdrawals may include recapture of tax deduction, state income taxes well as penalties. Withdrawals for registered apprenticeship programs and student loans can be withdrawn free from federal and Illinois income tax. If you are not an Illinois taxpayer, these withdrawals may include recapture of tax deduction, state income tax as well as penalties. You should talk to a qualified professional about how tax provisions affect your circumstances.↩

Federal qualified higher education expenses include:

• tuition, fees, books, supplies, and equipment required for enrollment or attendance of a Beneficiary at an eligible educational institution;
• expenses for housing and food (room and board) incurred by students who are enrolled at least half-time and subject to certain limitations;
• expenses for the purchase of computer or certain peripheral equipment, computer software, or Internet access and related services if it is to be used primarily by the beneficiary during any of the years the beneficiary is enrolled at an eligible educational institution;
• expenses for special needs services in the case of a special needs beneficiary which are incurred in connection with such enrollment or attendance;
• tuition, fees, books, supplies, and equipment required for participation of the beneficiary in an apprenticeship program;
• payments on qualified education loans of the beneficiary or a sibling of the beneficiary, subject to a lifetime limit of $10,000 per individual;
• (for federal but not Illinois tax purposes) K-12 expenses subject to an annual per beneficiary limit for all Section 529 Plans of $10,000 per taxable year for taxable years prior to December 31, 2025, and $20,000 per taxable year for taxable years beginning after December 31, 2025; Tuition;
  • curriculum and curricular materials;
  • books or other instructional materials;
  • online educational materials;
  • tuition for tutoring or educational classes outside of the home, including at a tutoring facility, but only if the tutor or instructor is not related to the student and (i) is licensed as a teacher in any state; (ii) has taught at an eligible educational institution, or (iii) is a subject matter expert in the relevant subject;
  • fees for nationally standardized norm-referenced achievement tests, advanced placement exams or any exams related to college or university admission;
  • fees for dual enrollment in an institution of higher education; and
  • educational therapies for students with disabilities provided by a licensed or accredited practitioner or provider, including occupational, behavioral, physical, and speech-language therapies. and
• (for federal but not Illinois tax purposes) postsecondary credentialing expenses.
  • tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a beneficiary in a recognized postsecondary credential program, or any other expense incurred in connection with enrollment in or attendance at a Recognized postsecondary credential program if the expense would, if incurred in connection with enrollment or attendance at an eligible educational institution, be treated as qualified higher education expenses;
  • fees for testing if required to obtain or maintain a recognized postsecondary credential; and
  • fees for continuing education if required to maintain a recognized postsecondary credential.

In the event of a refund of amounts paid for qualified higher education expenses from an eligible educational institution, the refund may not be redeposited to the 529 plan within 60 days without the amount being subject to tax. The recontribution amount cannot exceed the amount of the refund.

State tax treatment of withdrawals is determined by the state where you file state income tax.

Review the plan description for additional details on eligible expenses and withdrawals.