Four plans were downgraded from bronze to neutral in Morningstar’s latest ratings—advisor-distributed plans in Rhode Island and Colorado and both advisor- and direct-distributed plans in Indiana were downgraded for failing to keep up with the improvements made by their peers and, in the case of Indiana’s plans, levying high fees on participants.

Five plans were rated negatively on Morningstar’s scorecard, demonstrating at least one flaw that makes them “worth avoiding” for people saving for college, Morningstar said. In the case of Nevada’s USAA College Savings Plan, a change of managers occurring after Victory Capital Holdings purchased USAA’s asset management business happened so quickly that the state wasn’t able to vet the changes.  In other cases, plans high fees that have not kept up with the pace of declining fees among their peers caused directly distributed plans from North Dakota and Arkansas to receive negative ratings.

The remaining 27 plans were rated neutral by Morningstar’s analysts, who said that they were not good choices for out-of-state residents but might be good for investors who live in state because of benefits like state income tax breaks, which weren’t factored into the analysts’ ratings.

Morningstar’s analysis rated 62 529 plans representing more than 97% of the assets in the 529 space.

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