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Grading on a Curve: Leaders and Laggards in the Evolving 529 Market

As most 529 plans make improvements, plans that stay stagnant are falling behind.

Morningstar Direct and Office clients can access the full report here.

Since Morningstar began covering 529 plans, the industry has consistently improved. Fees have fallen, underlying investment quality has increased, and oversight has strengthened. As a result, we launched new Morningstar Categories for 529 plan age-based portfolios in April 2019. Federal policymakers have shown growing interest in expanding the flexibility of the 529 plan; the most recent expansions of tax benefits could have consequences for 529 plan administration. Morningstar’s 529 Landscape paper showcases the industry’s most recent improvements, as well as how our evaluations have evolved as we continue to raise the bar for plans. Here are our key findings.