The Best College Savings Plan is Getting Better
By Penelope Wang

(MONEY Magazine) – The cost of a college education may be rising scary fast, but the act of saving for it is finally getting cheaper. Competition has broken out among providers of 529s--the tax-advantaged plans for funding college costs--and that can only be good for you. Study this formula for finding an A+ plan.

• TAKE ANOTHER LOOK AT YOUR STATE'S OPTIONS. Vanguard cut expenses on its Nevada 529 to as little as 0.5%. It also brought low-cost options to North Dakota and Pennsylvania. T. Rowe Price fees dipped in Alaska and Maryland. And Fidelity began offering index funds with expenses capped at 0.5% in Arizona, California, Delaware, Massachusetts and New Hampshire. Earnings on any 529 investment are free of all income taxes if you use the money for education costs. And a portion of contributions to in-state plans may be state tax deductible for residents in 30 states plus the District of Columbia. If your home state is among them and you find an in-state plan with fees under 1%, grab it.

• CHECK OUT THE COMPETITION. If you're in one of the 20 other states, don't commit to a local plan until you've looked for one with lower fees elsewhere. (Compare at Savingforcollege .com.) One top deal: Utah's Educational Savings Plan offers great funds and expenses of 0.39% or less.

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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.