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Best and Worst 529 College Savings Plans
By JLP | March 1, 2007
There was an excellent article from Morningstar about the best and worst 529 plans. Their list:
The Best…
Colorado Schoars Choice* – Legg Mason
Maryland College Inv Plan – T. Rowe Price
Nebraska College Savings – Union Bank & Trust
Utah Educational Savings – Utah (Vanguard)
Virginia CollegeAmerica* – Virginia (American Funds)
The Worst…
Alabama Higher Education 529** – Van Kampen
Alaska John Hancock Freedom 529* – John Hancock
Missouri MOST 529 Advisor* – Upromise
Nebraska AIM College Saving* – AIM
West Virginia Conerstone SMART529* – Hartford
West Virginia Leaders SMART529* – Hartford
The reason most of these plans are in the worst category is due to their fees. One reason for that is the fact that they are broker-sold funds, which adds to their expenses since the broker has to get paid for their services.
That’s the list. It might be a good starting-point in helping you find a plan that’s best for you. I promise to do more college planning articles in the future.
Topics: College Funding | 6 Comments »
March 2nd, 2007 at 1:00 am
Thanks for the heads up. I’m in one of the worst states and currently putting money in the plan. I’ll have to check into it further. Thanks!
March 2nd, 2007 at 8:17 am
Rock on T. Rowe Price!!
March 2nd, 2007 at 9:47 am
Well, they seemed to focus specifically on state-sponsored 529 plans. One that I really like is the TIAA-CREF Independent 519 Plan. It is a plan that is sponsored by over 200 private member universities. It is a pre-paid tuition 529, so there is no investment consideration other than education inflation. Plus, purchases are made with a 1% discount. In addition, all fees are handled by member universities.
Now, you just have to consider if your children will go a to a private university, and if they will go to one of the members. I am splitting my contributions between this and my state’s plan which offers a state tax credit of 20% up to $1000 ($5000 contribution). This will be used for any kids that don’t go to a private school, and for basic expenses beyond tuition for those that do.
I have three kids, and I have a feeling that at least one of them will go to a private university. If not, I plan on looking into law school about the time that my oldest will be considering her college plans. I would have loved to have gone to one of these particular schools, and I wouldn’t mind going there for law school.
March 2nd, 2007 at 11:11 am
Huh, let’s blot out the the state affiliation in the list of best plans:
… Legg Mason
… T. Rowe Price
… Union Bank & Trust
… Vanguard
… American Funds
Sounds like they wanted to do an article showing best plans but realized they needed to mention some of their advertisers. Not too surprising I suppose.
March 2nd, 2007 at 11:16 am
I recently (ok, it was like four months ago) read that Utah was one of the best plans.
Thanks for the link. College planning/QTPs/529s has got to be one of the most daunting aspects of personal finance as far as I’m concerned.
So Nebraska has the best and the worst? Interesting.
March 19th, 2007 at 2:48 pm
[...] FMF talks about 529 Plans. – This is basically the same post I did earlier this month. [...]