College Investment Plans - Role of States
State governments administer College Savings Plans but the plans are managed by private organizations. Sometimes, multiple private organizations manage a single plan. For example, lets look at New York’s direct-sold plan, NY's 529 College Savings Plan. There are three entities involved: The State of New York, Upromise and Vanguard:
The State Of New York (Program Administrator)- responsible for implementing and administering the Direct Plan.
Upromise Investments, Inc. / Upromise Investment Advisors, LLC (Program Managerand Recordkeeping and Servicing Agent, respectively)- responsible for day-to-day operations, including effecting transactions.
The Vanguard Group, Inc. (Investment Manager) - manages the plan's investments. Meanwhile, the Vanguard Marketing Corporation markets, distributes, and underwrites the plan.
Each state has a different name for its College Savings Plan. Kentucky’s College Savings Plan is called the Kentucky Education Savings Plan Trust, while North Dakota’s is called College SAVE. Sometimes a state may have one name for each of its direct-sold plan, another name for each of its advisor sold plan and another name for its Prepaid Tuition Plan. Let's take a look at the all of the 529 Plans that Nevada offers:
1) USAA College Savings Plan (direct-sold College Savings Plan)
2) Vanguard 529 Saving Plan (direct-sold College Savings Plan)
3) SSgA Upromise 529 Plan (direct-sold College Savings Plan)
4) Nevada Prepaid Tuition Program (Prepaid Tuition Plan)
5) Putnam 529 Plan (advisor-sold College Savings Plan)
As long as the plan comes under the IRS’ 529 Plan designation, however, you are looking at 529 Plan no matter what the state calls it. The table below gives a list of the 529 Plans for each state.
Why are there three direct-sold College Savings Plans in Nevada? Well, because each one is different. The USAA College Savings Plan is unique in that it features options utilizing USAA mutual funds. Similarly, the SSga Upromise 529 Plan is unique in that it features options utilizing SPDR ETFs.
When you start researching College Savings Plans, you will quickly notice that the section of the state government that overseas such plans is the state Treasurer's office.You should go to the website of your state Treasurer to get the most up-to-date information about the kind of plans they are now offering. The National Association of State Treasurer's website, www.nast.net, will guide you to your State Treasurer's site.
You should also be aware that even if you do not live in a particular state, you can still invest in that states College Savings Plans, although you may not be able to take full advantage of the tax benefits offered by that state.