Kathryn Pomroy
The best 529 plans can be valuable tools for saving for college (not to mention valuable estate planning tools). If you're looking for ways to save for your child or grandchild’s future college expenses, you’ve likely considered opening one of these tax-advantaged plans. But how do you choose the right one?
529 plans allow you, the contributor, to prepay a beneficiary's qualified higher education expenses at an eligible educational institution or to contribute to an account for paying those expenses. While 529 contributions must be made with after-tax money, your contributions grow free from federal or state tax, making them solid options for education savings. It's no wonder they have been rapidly growing in popularity.
However, 529 plans can vary. To select the best one, you’ll need to choose which type of plan makes sense for you by comparing tax breaks, benefits for state residents, fees, contribution options, withdrawal restrictions and investment options. Choosing the right plan can take a lot of research, but it’s worth it. An easy place to start is by checking out these top-ranked 529 plans.
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Best direct-sold 529 plans
Direct-sold 529 plans are issued directly from a state financial institution. If you choose one of these plans, you’ll be responsible for managing your own investments within the plan’s online account portal. For this reason, these plans are usually cheaper than investor-sold plans.
Based on the latest information available, these are the top 10 highest-ranked direct-sold 529 plans based on overall enrollment-based performance. methodology, according to Saving for College.
- T. Rowe Price College Savings Plan (Alaska)
- Bright Start Direct-Sold College Savings Program (Illinois)
- U.Fund College Investing Plan (Massachusetts)
- ScholarShare 529 (California)
- UNIQUE College Investing Plan (New Hampshire)
- CollegeAdvantage Direct 529 Savings Plan (Ohio)
- Invest529 (Virginia)
- New York's 529 College Savings Program (New York)
- ISave 529 (formerly College Savings Iowa) (Iowa)
- Edvest (Wisconsin)
Best advisor-sold 529 plans
Advisor-sold 529 plans are available through an investment firm. These accounts typically charge a higher fee, but financial advisers manage the plan’s investments for you. Some savers feel these accounts are worth the extra cost because of the access to professional investment advice, actively managed investments and flexible portfolios.
For 2025, here are Saving for College's 529 Ratings (released in late 2024 but applicable into 2025 with quarterly adjustments) for the top 10 highest-ranked advisor-sold 529 plans.
- BlackRock CollegeAdvisor 529 Savings Plan (New Jersey (also available in other states)
- T. Rowe Price College Savings Plan (Alaska, advisor version)
- CollegeAmerica (Virginia, national access)
- Putnam 529 for America (Massachusetts, advisor-guided)
- BlackRock CollegeAdvantage 529 (Ohio)
- Hartford SMART529 (Connecticut)
- New York's 529 Advisor-Guided College Savings Program (New York)
- U.Fund College Investing Plan (Advisor-Sold) (Massachusetts)
- Future Scholar 529 College Savings Plan (Advisor-Sold) (Nevada)
- ScholarShare 529 (Advisor-Sold) (California)
529 prepaid tuition plans
Another college savings option worth considering is a 529 prepaid tuition plan. This type of plan lets savers prepay tuition at today’s tuition rates at eligible public and private colleges or universities. According to FINRA, "Most states guarantee that the funds you put into a prepaid plan will keep pace with tuition."
Prepaid tuition plans only cover tuition expenses, unlike 529 plans, which cover other qualified expenses, like room and board, books and supplies. You can fund these accounts with one lump sum or through installment payments. Often, these plans must be used within 10 years, or the interest on initial contributions could be lost.
Here's a breakdown of the 18 states with prepaid tuition plans, including status and key details (based on Saving for College's latest data):
State | Plan Name | Open to New Enrollment? | Residency Requirement? | Notes |
Alaska | T. Rowe Price College Savings Plan (Prepaid Option) | No | Yes | Closed since 2009; existing accounts honored. |
Florida | Florida Prepaid College Plan | Yes | Yes | Largest program; covers tuition/fees at public schools; optional dorm coverage. |
Illinois | College Illinois! 529 Prepaid Tuition Program | No | Yes | Closed to new since 2017; active contracts guaranteed. |
Kentucky | Kentucky Educational Savings Plan (Prepaid) | No | Yes | Phased out; legacy plans supported. |
Louisiana | START Prepaid Tuition Plan | No | Yes | Closed; rollover to savings plan available. |
Maryland | Maryland Prepaid College Trust | No | Yes | Closed June 2023; existing holders can roll over to savings plans. |
Massachusetts | U.Plan Prepaid Tuition Program | Yes | No | Open to all; flexible for out-of-state use. |
Michigan | Michigan Education Savings Program (MET) | Yes | Yes | Contract-based; strong state guarantee. |
Mississippi | Mississippi Affordable College Savings (MACS) Prepaid | Yes | Yes | Unit-based; covers public in-state tuition. |
Nevada | Nevada Prepaid Tuition Program | Yes | Yes | Focuses on community colleges; expandable to universities. |
Ohio | College Advantage Prepaid | No | Yes | Legacy program; integrated with savings options. |
Pennsylvania | PA 529 Guaranteed Savings Plan | Yes | Yes | Flexible levels (community to Ivy-equivalent); usable nationwide. |
South Carolina | Future Scholar Prepaid | No | Yes | Closed; existing benefits honored. |
Tennessee | TNStars Prepaid (formerly HOPE) | No | Yes | Phased out; focus shifted to savings plans. |
Texas | Texas Tuition Promise Fund | Yes | Yes | Unit plan for public institutions; open enrollment periods. |
Virginia | Prepaid529 (Invest529 Prepaid) | Yes | Yes | Low minimums; convertible to cash for out-of-state. |
Washington | GET Guaranteed Education Tuition | Yes | Yes | Unit-based; backed by state full faith and credit. |
West Virginia | Prepaid Tuition Plan | No | Yes | Inactive for new; legacy support. |
529 plans can be part of your estate planning
Investing in a 529 plan is a great way for parents or grandparents to pass down wealth to the next generation. By helping college students graduate with lower or no student debt, you'll give your kids a leg up when it comes to starting their careers. For students interested in lower-income careers like the arts or non-profit work, graduating without debt may mean the difference between pursuing their dream career or slogging through a high-paying job they dislike to pay off debt.
A 529 plan may also jump-start your child or grandchild's retirement savings. Based on provisions introduced by the SECURE 2.0 Act, signed into law in December 2022 and effective from January 1, 2024, you can roll over tax-free and penalty-free up to a lifetime limit of $35,000 in a 529 to a Roth IRA opened by the 529 beneficiary for more than 15 years, provided certain conditions are met. The rollover is subject to annual Roth IRA contribution limits.
What's not to like about this versatile savings tool? (The annual contribution limit is that of the beneficiary, not the parents).
Related Content
- A Financial Planner's Guide to Unlocking the Power of a 529 Plans
- 529 to Roth IRA: Should You Rollover Unused 529 Funds?
- 529 Plans: A Powerful Way to Tackle Rising Education Costs
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