As the tuition costs at public and private colleges rise, students are graduating with pinching debt burden. Class of 2015, graduated with an average loan debt of $ 35,000 vs $28,950, the year before, according to government data analyzed by Mark Kantrowitz, publisher at Cappex.com. That's a 21% hike. As a parent, you could lift this burden off your child, if you just plan well.
One of the best avenues to start with are 529 college saving plans. 529's, as the name goes, are a tax-sheltered investments focused on saving for college expenses like tuition, computer, books or even housing. You can either buy them straight from the market or go via advisor route. Generally, direct sold plans are cheaper versus the ones sold by advisors.
Best 529 plans tend to have lower expense ratios, making them more cost effective. Out of the 50 states, the average expense ratio for the funds in Louisiana’s START Saving For College come in lowest at 0.14%, in part because they are dominated by funds from vanguard. New York’s 529 plan come in as second least expensive at 0.17%, and Utah’s Utah Educational Saving Plan has average expenses of 0.21%. The District of Columbia’s DC College Savings Program (1.13%) and Rhode Island’s College Bound Fund(1.06%) pinch the most in this category. Hover over the states in the interactive map below to search for the plans with highest and lowest expense ratios.
