Poll Finds Low Costs to Be Most Important Factor in Choosing 529 College Savings Plan

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Savingforcollege.com's most recent poll reveals that cost is the most critical factor to those deciding on which 529 plan to use. The results show fees and expenses to take precedence over other factors such as state tax deductions or past investment performance.

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Fortunately for college savers, expenses in 529 plans have dropped tremendously over the last nine years.

According to an online poll of visitors to Savingforcollege.com, fees and expenses are the most important factor when selecting a 529 plan. Savingforcollege.com is the leading independent resource and authority on Section 529 college-savings plans.

In answering the question “Which factor is MOST important to you when choosing a 529 plan?” 28% of respondents selected “low costs,” followed closely by “the tax deduction or matching contribution program in my state” (26%). The third most-selected factor, chosen by 18% of respondents, was “past investment performance/rankings.”

As of February 23, 2012, a total of 252 site visitors had submitted responses to the survey.

“The level of fees and expenses is certainly a key consideration when comparing 529 plans,” remarks Savingforcollege.com founder Joe Hurley, “especially when the plans you are comparing have the same or similar underlying investments.”

“Fortunately for college savers,” Hurley says, “expenses in 529 plans have dropped tremendously over the last nine years.” To make comparisons easier, Savingforcollege.com publishes a semi-annual 529 Fee Study on its website, ranking all direct-sold 529 plans based on the total 10-year costs of a $10,000 investment.

A smaller number of respondents chose other factors as being most important: "Well-known program/investment manager" received 12%; "Recommendation of family, friend or financial adviser" received 5%; and "Multi-manager (includes several fund families)" received 4%. Only 2% felt the most important factor was a recommendation by the media or a financial website.

Savingforcollege.com displays the results of over thirty non-scientific polls posted since 2005. The current poll asks “How many investment changes should you be allowed in your 529 plan?”

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Marie Osypian
JFH Innovative LLC
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