The wait is over.
Morningstar Analyst Ratings has identified the best and the worst of 2018’s college savings plans.
The list is based on five “P”s: Process, People, Parent, Price and Performance. In addition, Morningstar rated the plans according to any unique benefits, such as local tax breaks, grants and scholarships.
In 2018, Morningstar assigned analyst ratings to 62 plans representing more than 95 percent of assets invested in 529 plans. Morningstar upgraded two plans and downgraded nine.
Thirty-one plans following industry best practices, as well as offering some combination of low fees, a strong set of underlying investments, a solid manager selection process, a well-researched asset allocation approach, an appropriate set of investment options to meet investor needs, and strong oversight from the state and program manager, were rated Best-in-Class and received Analyst Ratings of Gold, Silver or Bronze.
The Morningstar Gold Awards for 529 Direct Distribution Plans went to the following plans:
- Bright Start College Savings in Illinois;
- Invest29 in Virginia;
- Vanguard 529 College Savings in Nevada; and
- my 529/Utah Educational Savings Plan in Utah.
The four plans repeated their Gold award-winning performances from 2017, standing out for their low costs, strong stewardship and exceptional investment options.
The nine plans that received the Morningstar Silver Awards for 529 Direct Distribution Plans also repeated their award-winning status from 2017. The Silver Awards went to the following plans:
- Bright Directions College Savings Advisor Distribution in Illinois;
- CollegeAdvantage 529 Savings Direct Distribution in Ohio;
- CollegeAmerica Advisor Distribution in Virginia;
- CollegeCounts 529 Direct Distribution in Alabama;
- Maryland College Investment Direct Distribution in Maryland;
- Michigan Education Savings Direct Distribution in Michigan;
- MOST -- Missouri's 529 Direct Distribution in Missouri;
- ScholarShare College Savings Direct Distribution in California; and
- T. Rowe Price College Savings Direct Distribution in Alaska.
The 18 Bronze-Rated Awards for 2018 included two college savings plans that Morningstar rated differently from their previous status last year. CollegeBound 529 Direct Savings Direct Distribution in Rhode Island was previously rated Silver, but this year was rated Bronze, while Oregon College Savings Direct Distribution in Oregon was rated Neutral last year, and this year was rated Bronze.
The 16 other Bronze-Rated Awards for 2018 went to the following plans:
- BlackRock CollegeAdvantage 529 Advisor Distribution in Ohio;
- College Savings Iowa 529 Direct Distribution in Iowa;
- CollegeBound 529 Advisor Distribution in Rhode Island;
- CollegeChoice 529 Direct Savings Direct Distribution in Indiana;
- CollegeChoice Advisor 529 Savings Advisor Distribution in Indiana;
- Connecticut Higher Education Trust Direct Distribution in Connecticut;
- Delaware College Investment Direct Distribution in Delaware;
- Edvest 529 Direct Distribution in Wisconsin;
- Fidelity Arizona College Savings Direct Distribution in Arizona;
- Future Scholar 529 (Direct) Direct Distribution in South Carolina;
- New York’s 529 Program (Advisor) Advisor Distribution in New York;
- New York’s 529 Program (Direct) Direct Distribution in New York;
- NextGen College Investing (Direct) Direct Distribution in Maine;
- Oregon College Savings Direct Distribution in Oregon;
- Scholars Choice College Savings Advisor Distribution in Colorado;
- U.Fund College Investing Direct Distribution in Massachusetts; and
- UNIQUE College Investing Direct Distribution in New Hampshire.
Morningstar rated 26 plans as Neutral. The following four plans were downgraded from their Bronze rating in 2017 to a Neutral rating in 2018:
- CollegeCounts 529 Fund Advisor Advisor Distribution in Alabama;
- MFS 529 Savings Direct Distribution in Oregon;
- NEST Advisor College Savings Advisor Distribution in Nebraska; and
- NEST Direct College Savings Direct Distribution in Nebraska.
Ivy InvestEd 529 Advisor Distribution in Arizona was upgraded to a Neutral rating in 2018 from its Negative rating in 2017.
The following 21 plans were rated Neutral in 2018:
- CollegeAccess 529 Advisor Distribution in South Dakota;
- CollegeInvest Direct Portfolio Direct Distribution in Colorado;
- Fidelity Advisor 529 Plan Advisor Distribution in New Hampshire;
- Future Scholar 529 (Advisor) Advisor Distribution in South Carolina;
- Ideal-Idaho College Savings Direct Distribution in Idaho;
- iShares 529 Advisor Distribution in Arkansas;
- John Hancock Freedom 529 Advisor Distribution in Alaska;
- LearningQuest 529 Program Direct Distribution in Kansas;
- Minnesota College Savings Direct Distribution in Minnesota;
- National College Savings Direct Distribution in North Carolina;
- NextGen College Investing Select Advisor Distribution in Maine;
- NJBEST 529 College Savings Direct Distribution in New Jersey;
- Oklahoma College Savings Direct Distribution in Oklahoma;
- Path2College 529 Direct Distribution in Georgia;
- Pennsylvania 529 Investment Direct Distribution in Pennsylvania;
- Scholar’s Edge Advisor Distribution in New Mexico;
- Schwab 529 College Savings Direct Distribution in Kansas;
- SSgA Upromise 529 Direct Distribution in Nevada;
- The Hartford SMART529 Advisor Distribution in West Virginia;
- Tomorrow’s Scholar 529 Advisor Distribution in Wisconsin; and
- USAA College Savings Direct Distribution in Nevada.
Morningstar gave five plans a Negative rating based on high fees deemed not to be competitive with those of their peers. The following four of five plans were downgraded from their 2017 Neutral rating:
- College SAVE Direct Distribution in North Dakota;
- Florida 529 Savings Plan Direct Distribution in Florida;
- GIFT College Investing Plan Direct Distribution in Arkansas; and
- TD Ameritrade 529 College Savings Direct Distribution in Nebraska.
Franklin Templeton 529 College Savings Advisor Distribution in New Jersey is the fifth plan to receive a Negative rating in 2018. The plan retains the same Negative rating in 2018 that it received in 2017.