ALBANY, NY (TIP): New York State Comptroller Thomas P. DiNapoli announced October 3, a new reduction in management fees for the state’s 529 College Savings Program’s Direct Plan. It is the fourth fee reduction since 2009 for Direct Plan account holders across the state. New York’s Direct Plan has more than 650,000 accounts valued at more than $16 billion.
“New York’s 529 College Savings Program has provided more than $524 million to help parents across the state pay for college this year,” said DiNapoli. “The latest reduction to the Direct Plan’s management fees means that more money will be available to help parents plan ahead for college. As the price of higher education continues to rise nationwide, every little bit helps parents make their money go further.”
The 529 College Savings Program is an investment tool designed to help parents save for college. New York’s program began in 1997 and offers tax deductions up to $10,000 annually. DiNapoli’s office and the Higher Education Services Corporation oversee New York’s program.
With approximately $16 billion in total assets, New York’s 529 Direct Plan is the largest direct sold 529 plan in the United States. The latest reduction, from 0.17 percent to 0.16 percent, follows previous reductions beginning in 2009 which decreased management fees from 0.55 percent to 0.17 percent.
The Direct Plan offers a variety of investment options including three age-based portfolio options that parents can choose from based on risk tolerance and the age of their child. These options, which invest exclusively in low-cost Vanguard index funds, are designed to become more conservative portfolios over time until the child is ready for college. Additionally, the plan offers 13 individual Vanguard portfolios which enable parents to create their own investment strategy.
New York’s Direct Plan is managed by Ascensus Broker Dealer Services, Inc. and investment management services are provided by Vanguard. The Direct Plan is available to U.S. citizens across the country, and individuals can open an account with as little $25 to begin saving for college costs including tuition, certain room-and-board expenses, books, and supplies.