College Saving Plans

November 1, 2011 by staff 

College Saving Plans, Six plans for college savings earned a “Top” Morningstar rating in a report on the industry of 529 last week. 529 industry assets under management increased by 12% over the previous year, and now represents 83 133 billion in savings plans for college is located in 48 states. The best plans, five of which earned top marks last year and are considered the best in its class due to low rates, superior performance and management experience. Ohio, Virginia, Maryland, Arkansas, Nevada and Utah, all newcomers made the cut.

“Top” Morningstar 529 Plans

- CollegeAdvantage 529 Savings Plan (OHIO)
- CollegeAmerica (VIRGINIA)
- Maryland College Investment Plan
- T. Rowe Price College Savings Plan (ARKANSAS)
- The Vanguard 529 College Savings Plan (NEVADA)
- Savings Plan for the Education of Utah

In particular, plans of the 58 studied 529 guaranteed “fund” rating. Last year, only cellar dweller, CollegeBoundfund of Rhode Island, made many changes throughout the year to move up in weight to “below average.”

“Overall I think the industry is getting stronger,” says Laura Lutton, editor of Morningstar Fund Research and co-author of the study. “It’s very difficult to find a really bad investment option in a 529 these days, which I think is a testament to the industry matures. We have not seen any plan out there that were worthy of the label background.”

As with mutual funds, the top 529 plans often sport the lowest fees in the business. Advisor-sold plans tend to have higher rates than their counterparts sold direct, of the 21 plans rated “above average” or “Top”, only three are advisor-sold.

“We have not seen much downward pressure on prices advisor-sold plans,” says Lutton. Live sells plans, competitive contracts to push prices down to the 529 industry. “As government contracts approaching renewal, often when we see a price reduction. Georgia, where the contract of a year or two after sunset, entered and negotiated a series of price cuts this year, and as part of the price cuts agreed to extend his contract with TIAA-CREF. “

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