SPRINGFIELD – Governor George H. Ryan today announced that Illinois College Savings Bonds will be offered for sale in mid October through brokerage firms across the state.
“Illinois College Savings Bonds are an excellent investment option for families who want to plan ahead and invest in their children’s college education,” Ryan said.
“In addition to being exempt from state and federal tax, College Savings Bonds benefit parents by providing a cash bonus when the proceeds are used for educational expenses at an Illinois college or university.”
Illinois College Savings Bonds are zero-coupon bonds. Individual bonds will be offered at discounted prices that are estimated to range from $1,800 for a 22-year bond to $4,750 for a three-year bond, depending on market conditions at the time of the sale. Each bond will pay $5,000 at maturity.
Illinois College Savings Bonds are exempt from federal and Illinois income taxes, and the purchase of up to $25,000 in bonds will not reduce eligibility for certain state assistance and loan programs.
The State expects to sell an estimated $140 million in maturity value of bonds. Morgan Stanley is the senior underwriter for the sale. Other underwriters include A.G. Edwards and Sons, Inc.; Banc One Capital Markets, Inc.; Edward Jones; Fidelity Capital Markets; Harris Trust and Savings Bank; LaSalle Capital Markets; Merrill Lynch & Co.; Prudential Securities; RBC Dain Rauscher Inc.; and UBS PaineWebber Inc.
Illinois College Savings Bonds are available from these underwriters at their offices in more than 600 Illinois communities and also may be available from other brokerage firms.
Persons who use bond payments to pay for higher education in Illinois may receive a bonus from the Illinois Student Assistance Commission. If the monies are used to fund higher education expenses at an Illinois college or university, the bonds at maturity pay a bonus ranging from about $60 to $440 per bond, depending on the maturity date.