Illinois families struggle to access 529 college savings funds plans in wake of change

A change in the administrator running Illinois’ Bright Start 529 college savings plans has left families unable to access their college savings quickly at a time when some need the funds to cover fall tuition bills.

Typically, participants can go online and have money routed automatically from their 529 college savings accounts to colleges awaiting tuition payments. But on July 17, the state began using a new company to administer the funds, according to a recording on the program’s help line.

Vanessa Kerrigan, of North Barrington, said that for three days her husband tried unsuccessfully online to transfer the couple’s savings to the colleges their two children will be attending soon.

The Kerrigans finally dialed a Bright Start help line and waited on hold for 35 minutes for an agent who was able to transfer the money manually to the colleges.

The Illinois State Treasurer’s office, which is responsible for the 529 plans, did not respond to repeated calls Friday, but a recording on the Bright Start help line said that call volume was heavy after the transfer to the new administrator. The same message assured individuals that their money is secure.

“It seems odd that you’d do this right before the semester begins and when tuitions are due,” Kerrigan said.

In early June, Illinois State Treasurer Michael Frerichs announced that the state would be moving its 529 management contract from Oppenheimer OFI Private Investments to Union Bank & Trust Co., cutting fees and creating more investment choices. Three 529 plans were to be consolidated into two.

Many colleges require tuition payments before allowing students to register for classes or move into dormitories. Kerrigan said she was concerned because her daughter must move into a dormitory early for a college athletic program.

State-run 529 plans allow people to put away money for college and avoid paying taxes on any money withdrawn to pay for college.

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via Home – Chicago Tribune

July 21, 2017 at 02:33PM

Illinois families struggle to access 529 college savings funds plans in wake of change

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