WASHINGTON – Assets in 529 college savings plans rose to an estimated $75.1 billion at the end of the first quarter of 2006, up 38% from $54.5 billion in the same quarter one year ago, according to the College Savings Foundation.
Section 529 college savings plans, which are offered on a state-by-state basis, give federal income tax-free treatment to earnings and distributions made from plan accounts used for qualified higher education expenses. Estimated net sales during the first quarter were $5.1 billion, the largest single quarter net sales total on record, according to CSF. The Financial Research Corp. compiled the data for CSF.
The fastest-growing category of portfolios was the "Static" portfolio, which features permanent underlying investments, such as a target-risk or a specific asset-class portfolio.
Brian Boswell, research analyst at FRC said, "Competition among plan providers for expiring contracts with the states is greater than ever. In many cases 529s are providing a broader investment selection and lower fees, making the programs more attractive."
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.