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COLLEGE SAVINGS 101

Just released: Latest 529 plan 5-Cap Ratings
http://www.savingforcollege.com/articles/just-released-latest-529-plan-5-cap-ratings-884

Posted: 2016-01-05

by Kathryn Flynn

Top-rated plans as of September 30, 2015

RELATED: See the top-rated plans as of December 31, 2016

About the 5-Cap Ratings

In addition to our 529 Plan Performance Rankings, Savingforcollege.com also provides a 5-Cap Rating to plans in order to help investors evaluate their college savings options. Each quarter, scores are assigned based on a variety of factors, which we separate into four categories: Performance, Costs, Features and Reliability. There is also a "Resident Upgrade" score to reflect any additional benefits offered to residents of the plan's sponsoring state. Ratings for advisor-sold plans assume that the higher cost structure is justified by the professional advice, due diligence and time savings a financial advisor can provide.

How it works

Each plan's category scores and "Resident Upgrade" score are computed on a scale of 1 to 5, and we use an averaging algorithm to calculate the overall 5-Cap Rating. Each plan's category score and overall Rating are featured on it's Plan Details page, so that individuals are able to weight each factor, such as historical investment performance, based on their own circumstances and preferences.

Separate scores are calculated for residents and non-residents of each sponsoring state, since many states offer special benefits for residents who invest in their 529 plans. In fact, 34 states, including the District of Columbia, currently offer a state tax credit or deduction for 529 plan contributions.

It's important to note that while we do employ a mathematical formula to calculate these scores, a significant portion of our analysis is subjective, and the Rating does not assess every aspect of a 529 plan, it's management or future investment performance.

Click here for more information on how we calculate the Ratings.

Top-rated plans as of September 30, 2015

A plan with a Rating of 5 Caps offers outstanding flexibility, attractive investments, and additional economic benefits (such as generous tax incentives) that can offer a substantial boost in savings for some investors. There are few, if any, weaknesses in these programs.

The plans listed below currently have a resident and/or non-resident rating of 5 Caps. View the complete list of updated Ratings here.

California: The ScholarShare College Savings Plan
- Non-resident rating = 5 Caps
- Resident rating = 5 Caps

Colorado: Direct Portfolio College Savings Plan
- Non-resident rating = 4 Caps
- Resident rating = 5 Caps

Scholars Choice College Savings Program
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

Illinois: Bright Start College Savings Program Direct-sold plan
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

Iowa: College Savings Iowa
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

Maine: NextGen College Investing Plan Client Direct Series
- Non-resident rating = 5 Caps
- Resident rating = 5 Caps

NextGen College Investing Plan Client Select Series
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

Michigan: Michigan Education Savings Program
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

Nebraska: Nebraska Education Savings Trust Advisor College Savings Plan
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

Nebraska Education Savings Trust Direct College Savings Plan
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

New York: New York's College Savings Program Direct Plan
- Non-resident rating = 5 Caps
- Resident rating = 5 Caps

Ohio: Ohio CollegeAdvantage 529 Savings Plan
- Non-resident rating = 5 Caps
- Resident rating = 5 Caps

Rhode Island: CollegeBoundfund (Direct-sold, Alternative RI)
- Non-resident rating = N/A, only available to residents
- Resident rating = 5 Caps

South Carolina: Future Scholar 529 College Savings Plan (Advisor-sold)
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

Future Scholar 529 College Savings Plan (Direct-sold)
- Non-resident rating = N/A, only available to residents
- Resident rating = 5 Caps

Utah: Utah Educational Savings Plan (USEP)
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

West Virginia: SMART529 WV Direct College Savings Plan
- Non-resident rating = N/A, only available to residents
- Resident rating = 5 Caps

Wisconsin: Edvest
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

Top-rated plans as of September 30, 2015

RELATED: See the top-rated plans as of December 31, 2016

About the 5-Cap Ratings

In addition to our 529 Plan Performance Rankings, Savingforcollege.com also provides a 5-Cap Rating to plans in order to help investors evaluate their college savings options. Each quarter, scores are assigned based on a variety of factors, which we separate into four categories: Performance, Costs, Features and Reliability. There is also a "Resident Upgrade" score to reflect any additional benefits offered to residents of the plan's sponsoring state. Ratings for advisor-sold plans assume that the higher cost structure is justified by the professional advice, due diligence and time savings a financial advisor can provide.

How it works

Each plan's category scores and "Resident Upgrade" score are computed on a scale of 1 to 5, and we use an averaging algorithm to calculate the overall 5-Cap Rating. Each plan's category score and overall Rating are featured on it's Plan Details page, so that individuals are able to weight each factor, such as historical investment performance, based on their own circumstances and preferences.

Separate scores are calculated for residents and non-residents of each sponsoring state, since many states offer special benefits for residents who invest in their 529 plans. In fact, 34 states, including the District of Columbia, currently offer a state tax credit or deduction for 529 plan contributions.

It's important to note that while we do employ a mathematical formula to calculate these scores, a significant portion of our analysis is subjective, and the Rating does not assess every aspect of a 529 plan, it's management or future investment performance.

Click here for more information on how we calculate the Ratings.

Top-rated plans as of September 30, 2015

A plan with a Rating of 5 Caps offers outstanding flexibility, attractive investments, and additional economic benefits (such as generous tax incentives) that can offer a substantial boost in savings for some investors. There are few, if any, weaknesses in these programs.

The plans listed below currently have a resident and/or non-resident rating of 5 Caps. View the complete list of updated Ratings here.

California: The ScholarShare College Savings Plan
- Non-resident rating = 5 Caps
- Resident rating = 5 Caps

Colorado: Direct Portfolio College Savings Plan
- Non-resident rating = 4 Caps
- Resident rating = 5 Caps

Scholars Choice College Savings Program
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

Illinois: Bright Start College Savings Program Direct-sold plan
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

Iowa: College Savings Iowa
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

Maine: NextGen College Investing Plan Client Direct Series
- Non-resident rating = 5 Caps
- Resident rating = 5 Caps

NextGen College Investing Plan Client Select Series
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

Michigan: Michigan Education Savings Program
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

Nebraska: Nebraska Education Savings Trust Advisor College Savings Plan
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

Nebraska Education Savings Trust Direct College Savings Plan
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

New York: New York's College Savings Program Direct Plan
- Non-resident rating = 5 Caps
- Resident rating = 5 Caps

Ohio: Ohio CollegeAdvantage 529 Savings Plan
- Non-resident rating = 5 Caps
- Resident rating = 5 Caps

Rhode Island: CollegeBoundfund (Direct-sold, Alternative RI)
- Non-resident rating = N/A, only available to residents
- Resident rating = 5 Caps

South Carolina: Future Scholar 529 College Savings Plan (Advisor-sold)
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

Future Scholar 529 College Savings Plan (Direct-sold)
- Non-resident rating = N/A, only available to residents
- Resident rating = 5 Caps

Utah: Utah Educational Savings Plan (USEP)
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

West Virginia: SMART529 WV Direct College Savings Plan
- Non-resident rating = N/A, only available to residents
- Resident rating = 5 Caps

Wisconsin: Edvest
- Non-resident rating = 4.5 Caps
- Resident rating = 5 Caps

 

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