State’s college savings plans rank high
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BY NANCY HICKS / Lincoln Journal Star
Two of Nebraska’s five college savings plans have been ranked among the top 10 plans based on performance by Savingforcollege.com, a leading online college savings site.
But one of the Nebraska plans continues to be ranked as one of the worst college savings plans in the country by Morningstar, which provides independent investment research.
Both the College Savings Plan of Nebraska and TD Ameritrade 529 College Savings Plan made the top 10 performing plans in studies of plans sold directly to investors.
College Savings Plan of Nebraska was the top performing plan in the three-year composite study by SavingforCollege.com.
Neither plan ranked below sixth in either the one-year or three-year study of performance.
The ranking was based on performance only and did not include fees or other costs.
Meanwhile, Nebraska’s Aim College Savings Plan made its third consecutive appearance on Morningstar’s worst list this year, which looks at fees and performance.
“Although the state made some changes to its plan last year, it remains too expensive compared to its peers,” according to Morningstar.
State Treasurer Shane Osborn in a news release praised the College Savings Plan of Nebraska and its high ranking.
The College Savings Plan of Nebraska “has a long and established track record of being a steady and remarkable value for parents, grandparents or guardians concerned about saving money for a child’s education,” he said in the release.
Union Bank and Trust is the program manager for the College Savings Plan of Nebraska, overseeing record keeping and administrative functions.
The College Savings Plan of Nebraska has investors from all 93 Nebraska counties and from all 50 states, according to Osborn.
The plan had $1.248 billion in assets on July 31, according to the Union Bank and Trust.
All five plans had about 165,000 accounts and $2 billion in assets on July 31.
Nebraska taxpayers who invest in a college savings plan, called 529 plans, can claim a state income tax deduction of up to $5,000.
In these plans, funds are typically invested in a variety of diverse mutual funds, with the returns growing on a tax-deferred basis, according to Osborn.
When the funds are used for qualified college expenses, they remain tax free, he said.
Reach Nancy Hicks at 473-7250 or nhicks@journalstar.com.
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