Reply to 529 plans & Possible State Financial Insolvency

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[quote=Anonymous]Looking at the Bright Directions College Savings Program, sponsored by the state of Illinois. I'm concerned re: the financial health of Illinois.  What happens to money invested in this 529 plan if a state goes bankrupt? Is the money accessible to the state government in the event of insolvency and/or bankruptcy? Is the money invested protected or insured in any way for the beneficiary? Is this a reason to look at another state's programs?

The Bright Directions College Savings Program is part of the Illinois College Savings Pool and is designed to qualify as a qualified tuition program under the provisions of Section 529 of the Internal Revenue Code. The Bright Directions College Savings Program is sponsored by the State of Illinois and administered by the Illinois State Treasurer, as Trustee. Union Bank & Trust Company serves as Program Manager and Northern Trust Securities, Inc., acts as Distributor. Investments in the Bright Directions College Savings Program are not guaranteed or insured by the State of Illinois, the Illinois State Treasurer, Union Bank & Trust Company, Northern Trust Securities, Inc., the Federal Deposit Insurance Corporation, or any other entity.[/quote]

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