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529 College Saving Plan Fees: Controlling Your Costs

Not all 529 plans come with the same types of fees - and the cost differences can be significantNot all 529 plans come with the same types of fees - and the cost differences can be significant

As a 529 plan investor, your goal is to find a plan that meets your needs and maximizes the available funds for qualified education expenses. For many people, this means finding a plan that matches your investment priorities with the lowest possible cost.

Fees vary widely among plans and within a plan’s investment options. The costs of high plan fees can even potentially outweigh any state tax benefits or other incentives, so it is important to compare costs for the plans and investment options you’re considering. For example, some 529 plans do not require start-up fees, maintenance fees, or sales charges.

Advisor-sold plans - in which you select a plan based on the advice you receive from an investment advisor or brokerage firm - generally cost more than direct-sold plans, in which you choose a plan directly from a financial services company serving as program manager for the state sponsoring the plan.

The chart below lists the fees to keep in mind as you select a 529 college savings plan that meets your needs.

Knowledge is Power: 529 Plan Fees to Look For

Fee Description
Sales charges (advisor-sold plans only)

These can be: 1) Initial sales charge as a percentage of the amount you invest; 2) Deferred sales charges imposed when you withdraw money from an investment option; or 3) a combination that can include front- and back-end sales charge and other expenses.

NOTE: AARP® College Savings Solutions from TIAA contains information about direct-sold plans only. As such, broker-related sales charges do not apply.

Enrollment fees Charged by some plans as a one-time fee when you first enroll. Plans may occasionally reduce or waive this fee for in-state residents.
Account maintenance fee Some plans charge this fee if your account balance falls below a specific amount, for example. They may be reduced or lowered for plan-state residents. The fee is usually a specific dollar amount: $30 per year, for example.
Program management fee This fee compensates the plan manager for providing services to the plan. These services can include investment advice, accounting, distribution and marketing, for example.
Administrative fees Some plans charge a fee to help pay for the plan’s operation of the plan, usually charged as a percentage of portfolio assets.
Underlying fund expenses Each investment portfolio in the plan pays a proportional share of the fees and expenses the plan’s mutual funds incur, such as investment management fees and other expenses
Investment management fees Paid to the investment manager for managing the 529 plan’s portfolios. The fee is charged as a percentage of portfolio assets.

The best source for plan-specific fee information is each 529 plan’s disclosure booklet, which you can generally be found on the plan provider’s website.

TIAA-CREF Tuition Financing, Inc. has been selected as the plan manager for ten 529 college savings plans. To download a PDF file of the disclosure booklet for one of these plans, please select a plan from the dropdown below.

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