6 Upgrades, 3 Downgrades in Our New 529 Plan Ratings
Our annual ratings of college savings plans show the industry continues to build upon improvements.
Leo Acheson: We continue to see meaningful improvements in the 529 industry. Fees are lower than they've ever been, underlying fund lineups are stronger, asset-allocation approaches have improved, and oversight from the state and investment manager is better. Not surprisingly, this year's 529 plan ratings release saw more upgrades than downgrades. We upgraded six plans and downgraded three.
Two direct-sold plans run by program manager Union Bank & Trust were upgraded. Illinois' Bright Start College Savings plan was completely overhauled in 2017 after the state replaced program manager Oppenheimer with Union Bank & Trust. The plan's investment lineup has improved meaningfully, and fees are very low, which led us to upgrade the plan to Gold from Bronze. The plan offers passively managed age-based portfolios at a cost that's among the lowest in the industry at 12 to 15 basis points, and investors can also select age-based options that blend compelling active funds with passively managed strategies. Meanwhile, we have similar confidence in the oversight at Alabama's CollegeCounts 529 plan, which we upgraded to Silver. Fees aren't as compelling as Illinois' plan, which is why it's not rated as highly.