MONEY Magazine

529 Guide 2007

See which plans are available in your state as well as Money Magazine's picks for your best options.

By Penelope Wang, Money Magazine senior writer
Additional reporting by Kathleen Knight

Tax-free withdrawals from 529s are now permanent, they don't hurt chances for financial aid and the offerings are better than ever. In other words, you'd be a fool to save for college any other way but in a 529 plan.

529 Guide
College savings plans may seem confusing. But it's nothing you can't handle by adhering to a few simple guidelines. (more)

The real question is which plan to pick. There are some 85 plans available nationwide the 70 largest are listed below - with almost every state offering at least one program and some, like West Virginia, offering as many as five.

All 529 savings plans provide the same federal tax benefits: Your investment earnings grow free of income tax. Your withdrawals, as long as you use them to pay higher education bills, are untaxed as well. What you don't get is an up-front federal tax deduction.

But 32 states and the District of Columbia have stepped in where the feds have not, offering residents a write-off on state income taxes for at least a portion of their 529 contributions.

And three states - Kansas, Maine and Pennsylvania - even allow residents to deduct their contributions to out-of-state plans as well.

If you live in a high-tax state that offers a big deduction for 529 contributions, your best 529 plan is one in your own backyard - that is, as long as the plan also has reasonable expenses and offers solid investment choices. We selected 22 plans as top choices on this basis, in addition to another 5 whose strong management and low fees make them top choices not only for their own state's citizens, but for anyone whose in-state plan doesn't merit a star.

 
 
State: Plan name: Program Manager / Investments Offered Web site:
Arkansas GIFT College Investing Plan Upromise and Vanguard / Vanguard mutual funds www.thegiftplan.com
Colorado Direct Portfolio College Savings Plan Upromise and Vanguard / Vanguard mutual funds www.collegeinvest.org
Connecticut Connecticut Higher Education Trust (CHET) TIAA-CREF / TIAA-CREF mutual funds www.aboutchet.com
Georgia Georgia Higher Education Savings Plan TIAA-CREF / TIAA-CREF mutual funds www.gacollegesavings.com
Kansas Learning Quest 529 Education Savings Program American Century / Multiple fund families www.learningquest.com
Louisiana START Saving Program Louisiana State Treasurer / Multiple fund families www.startsaving.la.gov
Maryland College Savings Plans of Maryland - College Investment Plan T. Rowe Price / T. Rowe Price mutual funds www.collegesavingsmd.org
Mississippi Mississippi Affordable College Savings (MACS) Program TIAA-CREF / TIAA-CREF mutual funds www.collegesavingsms.com
Missouri MOST - Missouri's 529 College Savings Plan Upromise Investments / Multiple fund families www.missourimost.org
Nebraska College Savings Plan of Nebraska Union Bank and Trust Company / Multiple fund multiple fund families www.planforcollegenow.com
New York New York's 529 College Savings Program - Direct Plan Upromise and Vanguard / Vanguard mutual funds www.nysaves.org/
North Carolina National College Savings Program College Foundation, Inc. / Multiple fund families www.nc529.org/
North Dakota College SAVE Upromise Investments / Vanguard mutual funds www.collegesave4u.com/
Ohio CollegeAdvantage 529 Savings Plan Ohio Tuition Trust Authority / Multiple fund families www.collegeadvantage.com
Oklahoma Oklahoma 529 College Savings Plan TIAA-CREF / TIAA-CREF mutual funds www.ok4saving.org
Oregon Oregon College Savings Plan OppenheimerFunds / OppenheimerFunds and Vanguard mutual funds www.oregoncollegesavings.com
Pennsylvania Pennsylvania 529 Direct Investment Plan Upromise Investments and Vanguard / Vanguard mutual funds www.pa529direct.com
South Carolina Future Scholar Direct Program Columbia Management / Columbia mutual funds, Transamerica Life www.futurescholar.com
Vermont Vermont Higher Education Investment Plan TIAA-CREF / TIAA-CREF mutual funds and Vermont Student Assistance Corporation interest-bearing notes services.vsac.org/ilwwcm/connect/VSAC
Virginia Virginia Education Savings Trust (VEST) Virginia College Savings Plan Board / Multiple funds www.virginia529.com
West Virginia SMART529 Select Hartford Life / Hartford and INVESCO mutual funds www.smart529select.com
Wisconsin EdVest Wells Fargo / Multiple funds including Wells Fargo Funds www.edvest.com
The five plans below are good for their own state's citizens, but also for anyone whose in-state plan doesn't merit a star.
California The ScholarShare College Savings Plan Fidelity Investments / Fidelity Investments mutual funds www.scholarshare.com
Iowa College Savings Iowa Upromise Investments and Vanguard / Vanguard mutual funds www.collegesavingsiowa.com
Michigan Michigan Education Savings Program TIAA-CREF / TIAA-CREF mutual funds www.misaves.com
Nevada The Vanguard 529 Savings Plan Upromise Investments and Vanguard / Vanguard mutual funds www.vanguard.com
Utah Utah Educational Savings Plan (UESP) Trust Utah Higher Education Assistance Authority / Public Treasurer's Investment Fund and Vanguard mutual funds www.uesp.org/
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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.