Morningstar Finds Improvement in 529 Plans

Morningstar’s fifth annual best and worst 529 college savings plan study found improvements in plan investment lineups and fees.

“We’ve witnessed noteworthy improvements in 529 college savings plans over the past few years,’ said Marta Norton, Morningstar mutual fund analyst and author of the study, in a press release. “Overall, costs have come down, many of the poorer plans have improved their fund lineups considerably, and some ineffective plan administrators have exited the 529 plan management business entirely.’

The press release said Illinois’ Bright Start College Savings Program is a major turnaround story in the study. Hiring OppenheimerFunds, Inc. as the plan’s administrator lowered fees and provided more diverse investment options. Maryland College Investment Plan, again on the best list, features high-quality funds, customization, and low fees.

Morningstar said two of its favorite plans are Virginia’s Education Savings Trust and College America plans, which both boast low fees and diversification. Colorado’s Scholars Choice offers investors reasonable expenses and exposure to top investment managers.

New names on the worst list include:

  • Putnam CollegeAdvantage, Ohio’s broker-sold plan, for poor fund performance and high manager turnover,
  • Mississippi TIAA-CREF Affordable College Savings Program and Mississippi TIAA-CREF Affordable College Savings Advisor Program, for high fees and limited investment choices or asset class exposure, and
  • New York’s 529 College Savings Program, for lack of diversification – specifically no international exposure, which means missed gains in foreign markets and no protection in a U.S. market downturn.

For the complete 529 plan study and additional resources, visit