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529 College Savings Plan Fees Continue to Drop

Jul 28, 2012

Congratulation parents, costs for 529 plans are continuing to drop. 529 plans are investment accounts that help you save for college and post high school training and have tax saving benefits. This shrinking of fees is just an overall benefit for all parents saving for college.

No matter where you save with a 529 plan you are going to have to pay management fees for your account. There isn't an overall way to compare fees between 529 plans and that is why you must inquire what the total fees are when applying for a plan. The terminology between plan companies int he industry can be different so check thoroughly.

The best part about the expense on these plans shrinking is that extra money continues to grow and will affect the bottom line when you finally use the money. A little extra growth will mean a lot when applied over a 18 year time frame.

529 college-savings plans continue to bring down their costs, according to a study by, with several states cutting expenses in their lowest-cost investment options by more than 25% over the past year.

While most 529 plans saw no appreciable change in expenses over the last year, plans in Alaska, California, Maine, Maryland, Mississippi, Nevada (Upromise), New York, and Virginia saw decreases of 25 percent or more. Only three 529 plans experienced an increase in their lowest-cost options, due in each case to a slight jump in the expense ratios of underlying funds.

Among direct-sold 529 plans available to residents of any state, Virginia's VEST offered the lowest-cost option, a money-market option with a 10-year cost of only $117 on a $10,000 investment. Plans from California, New York, Ohio, and Utah each had at least one investment option with 10-year costs below $300.

Resident-only 529 plans in Louisiana, Rhode Island, and South Carolina were also noted for offering very low-cost options.

Got further questions? Catch me on twitter and DM me @529SavingsPlans or e-mail me at 529CollegePlans at Want to be heard? Leave a reader comment below.

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