Fee reduced to save for college

State Treasurer Kate Marshall announced today the fee for each age-based option in the Vanguard 529 College Savings Plan is now 0.19 percent, down from 0.21 percent. This reduction in fees brings Nevada’s Vanguard 529 plan down to the lower end of the fee spectrum compared with other states and will facilitate the Vanguard plan continuing to be identified as one of the top plans in the country.

Marshall said, “The fees were reduced as a result of negotiations between my office and Vanguard. My office and Vanguard saw an opportunity to take advantage of Vanguard’s economies of scale and operating efficiencies and pass along the resulting reduced costs to consumers.”

According to a spokesman from Vanguard, the latest fee drop marks the seventh time expenses have been lowered for the Plan’s investors. When the partnership amongst the College Savings Board, Vanguard, and Upromise Investments (now Ascensus Broker Dealer Services, Inc.) began in 2002, the average annual fee for age-based portfolios was .65 percent.

With a 529 direct savings plan like the Vanguard 529 Plan, parents or family members can open a college savings account directly, without the help of a financial adviser. Investment earnings are tax free as long as they are used for qualified higher education expenses. Since 2007, the number of accounts opened by Nevadans in Nevada’s college savings plans has increased 52 percent.

The Vanguard 529 College Savings Plan includes more than 3,600 Nevada families as account owners, with college savings of around $118 million invested. The fee reduction will result in an estimated $2 million in savings per year for the Plan’s more than 250,000 clients across the United States.

The Vanguard 529 College Savings Plan has repeatedly been named a gold-rated college savings plan by Morningstar, a leading provider of independent investment research. Only three other 529 plans in the nation have received this rating.

Roughly 50 percent of the Plan’s $10.3 billion in assets are invested in broadly diversified, age-based portfolios, which are designed to help investors stay appropriately diversified over time. The age-based portfolios maintain allocations to broad markets, such as U.S. stocks, U.S. bonds, and international stocks, and adjust automatically to more conservative allocations as college gets closer.

To learn more about The Vanguard 529 College Savings Plan and other college savings plan options available to Nevada families, go to http://NevadaTreasurer.gov and then click on the College Savings Plans link.