College Savers Pay a Premium for 529s
Expenses continue to shrink, but mutual funds are still cheaper.
While the gap is shrinking, the costs of 529 college savings plans continue to create a tough hurdle when compared with traditional mutual funds.
As part of its annual study of the 529 college-savings-plan industry, Morningstar's team of analysts dug into the costs associated with 529 plans. Because of many factors, including smaller asset bases and costs associated with state-level administration and marketing, 529 investment options typically carry more-expensive price tags than comparable traditional open-end mutual funds.