Top 529 Plans: SavingForCollege 5-Cap Ratings List 2012 is a popular privately-run site for researching and comparing 529 college savings plans. In June 2012, they updated their rating system which represents their “opinion of the overall usefulness of a state’s 529 plan based on many considerations.” The judgement criteria include:

  • Performance. They selected similar “apples-to-apples” portfolios with 7 different asset allocations from each plan and rated them based on historical performance. Rankings are updated each quarter.
  • Costs. Total average asset-based expense ratios among plans are compared, in addition to separately considering program manager fees, administrator fees, and annual account maintenance fees.
  • Features. This includes other factors that affect participants, including the ability of the plan change their investment options quickly if called for; creditor protection under the sponsoring state’s laws; availability of FDIC-insured options; minimum and maximum contribution restrictions.
  • Reliability. The appears to measure the likelihood of a good plan staying a good plan. Do they have experienced program managers? Does the plan have a good amount of assets? What is the quality of the documentation and reporting? How restrictive are the withdrawal and rollover processes?

Here is the full list of 5-Cap Ratings for each state, on a scale of 0 to 5 Caps. Note that there are separate ratings for in-state and out-of-state residents. Out of the 100+ different plans they rated, here are the 8 programs available directly to the public that attained the top 5-Cap Rating for out-of-state residents (alphabetical order):

  • California: The ScholarShare College Savings Plan
  • Maine NextGen College Investing Plan – Direct Plan
  • New York’s College Savings Program – Direct Plan
  • Ohio CollegeAdvantage 529 Savings Plan

The following plans received a 5-Cap Rating for in-state residents:

  • California: The ScholarShare College Savings Plan
  • Colorado: Direct Portfolio College Savings Plan
  • Colorado: Scholars Choice College Savings Program – Advisor Plan
  • Illinois: Bright Start College Savings Program – Direct Plan
  • Iowa: College Savings Iowa
  • Maine: NextGen College Investing Plan – Direct Plan
  • Maine: NextGen College Investing Plan – Advisor Plan
  • Michigan: Michigan Education Savings Program
  • Nebraska: Nebraska Education Savings Trust – Advisor Plan
  • Nebraska: Nebraska Education Savings Trust – Direct Plan
  • New York: New York’s College Savings Program – Direct Plan
  • Ohio: Ohio CollegeAdvantage 529 Savings Plan
  • Rhode Island: CollegeBoundfund – Direct Plan
  • South Carolina: Future Scholar 529 College Savings Plan – Advisor Plan
  • South Carolina: Future Scholar 529 College Savings Plan – Direct Plan
  • Utah: Utah Educational Savings Plan (USEP)
  • West Virginia: SMART529 WV Direct College Savings Plan
  • Wisconsin: Edvest

The SavingForCollege Top-rated 5-Cap plans are slightly different than the Morningstar Top-rated Gold plans. However, in general the top 20 or so plans are pretty much the same. Remember to consider your in-state plan first for potential tax advantages.


  1. Hello,

    I are shopping for a college savings plan for our 1-yr-old daughter but we are a little clueless what to choose. We are leaning towards a pre-paid tuition plan such as the U Plan by Massachusetts ( to avoid inflation, and combining it with a 529 plan for private colleges ( What are your thoughts on this? We are also maxing out on the Coverdell ESA contribution through our parents to prevent our daughter’s future student loan application being affected by the ESA. Any comments or suggestions? I enjoy your blog immensely and thank you in advance for your reply!

  2. I’ve thought about the Massachusetts U.Plan, as I am a resident there, but from what I can tell, if I move to another state and my child wants to use the cash value in the plan to attend a school in another state, the money might not be tax free since it’s not a true 529 plan. I think it depends on the laws in whichever other state you’re in. I’m not certain about any of this, however. But, for now, I’m sticking with the U.Fund and its index-based options.

  3. I agree that the U plan is not a true 529 plan. It is a prepaid college plan that allows you to lock in the college tuition fee at the time of purchase. That intrigues me because with the way most college tuitions increase year after year at a consistent 5-10% annual rate, the U plan is exactly what we were looking for: hassle-free, secure (backed by state bond), no state residency requirements (we are in CA), and guarantee return due to inflation and unregulated tuition hikes. If use at non-participating and out-of-state institutions, it provides a return of principal plus interest compounded annually equal to the CPI; not sexy, but at least earnings are tax-free and gives us the flexibility and security. Since this is for my daughter I do not want to take any risks at all, plus I got other things to worry about such as potty-training my daughter so we are peaceful with this.

    Private college 529 seems to work the same way but lack the backing by a state. Still need to do more study on this plan, but so far everything looks good

  4. Thanks for sharing about the Mass. U. Plan. It is an interesting plan, given that it guarantees CPI interest, which is higher than TIPS yields out to 20 years. The tax situation is rather uncertain, as even being federally-tax free is not guaranteed. From their site:

    The Tuition Certificates are exempt from Massachusetts income tax. In addition, it is MEFA’s bond counsel’s opinion that the interest on and benefits received from the Tuition Certificates are exempt from federal income taxes, although there is some uncertainty as to whether they are entirely tax-exempt since the program is the first to rely on CPI-indexed general obligation bonds and the IRS has not made a tax ruling on the U.Plan. State tax treatment may differ for residents of other states.

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