Savingforcollege.com 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.