9 best 529 plans to set you child up for college success

College isn’t getting any cheaper: According to the College Board, attending a four-year, in-state public college topped $28,840 for the 2023-2024 school year, an 11% increase in just five years.

A smart way to start saving is through a 529 plan, which is a tax-advantaged savings account that can be used for education expenses, including qualified student loan repayments of up to $10,000 per beneficiary. In some states, 529 plan funds can also be tapped into for K-12 tuition expenses.

We crunched the numbers, spoke with industry experts, and evaluated each company based on established methodology to determine the best 529 plans. 

To better understand how 529 plans work and their benefits, it helps to start with the terminology. Contribution limits and tax benefits generally apply to each investment account beneficiary.

• Income tax deduction: This is an amount you can deduct from income on your state income taxes. There is no federal income tax deduction for 529 plans, and you generally need to be a state resident to claim a deduction for contributions to that state’s plan.
• Tax credit: This reduces the amount of tax you owe on a dollar-for-dollar basis, making it a better benefit than an income tax deduction in many cases.
• Annual contribution limit: 529 plans don’t have annual contribution limits, but state tax benefits may only apply to contributions up to a certain amount.
• Aggregate contribution limit: 529 plan rules limit how much can be contributed on behalf of a single beneficiary over the lifetime of all accounts per state. States set their own limits.
• 529 plan fees: Plan fees, or asset-based fees, generally consist of administrative or program management fees plus underlying fund-specific expenses. 
• Static portfolio: Investment allocations are fixed and do not update or adjust based on age but may be periodically reallocated to match investment goals. It’s up to the account owner to change a static portfolio.
• Age-based and enrollment date portfolios: These investment blends are designed to automatically re-allocate, generally to a more conservative mix, as the account grows and college enrollment nears. This plan type may carry less risk than a static portfolio and is designed for less experienced investors.

My529 is Utah's official 529 plan. You don't have to be a state resident to participate or use the account funds at a Utah school. No minimum contribution is required to open Utah's my529 plan, and the plan's aggregate contribution limit is among the highest of any state. Utah’s plan is one of the few offering tax credits.

There are various investment options, including portfolios that automatically adjust depending on target enrollment date or age and static portfolios in which you can choose specific investments or allocate based on risk. 

• Tax benefit: Utah taxpayers can claim a state income tax credit of up to $109.66 for single filers or $219.31 for married filing jointly. 
• Aggregate contribution limit: Up to $560,000 across all accounts for the same beneficiary.
• Fees: Total annual asset-based fees range from 0.131% to 0.453% depending on investments, including underlying fund expenses and administrative fees.

Illinois' Bright Start College Savings plan boasts a generous state income tax deduction for Illinois taxpayers and a high aggregate contribution limit. The plan's fees are competitive, though they can be on the high side depending on fund selection, and there’s no minimum required contribution to open an account. 

Investment options include 17 fund portfolios from mutual funds families, including Vanguard and T. Rowe Price, and age-based and target portfolios.

• Tax benefit: State income tax deduction for Illinois taxpayers of up to $10,000 for single filers and $20,000 for married filing jointly.
• Aggregate contribution limit: $500,000.
• Fees: There is a 0.07% program management fee and a 0.025% state fee. Investment expenses range from 0% to 0.67%, and total asset-based fees range up to 0.77%, depending on your chosen fund.

You'll only need $25 to start saving with Ohio's CollegeAdvantage 529 plan, the minimum contribution amount. The CollegeAdvantage Direct Plan offers a slew of investment options, including ready-made, age-based, and risk-based portfolios. Plus, individual investment options and FDIC-insured tax-free bank accounts from Fifth Third Bank are available on Ohio’s 529 plan. Many of its investment options are managed by Vanguard, with some overseen by Dimensional Fund Advisors.

• Tax benefit: Ohio residents can claim a state income tax deduction of up to $4,000 per year per child. If they contribute more in one year, they can carry the amount forward to deduct in future years. 
• Aggregate contribution limit: $523,000.
• Fees: Total annual asset-based fees range from 0.00% to 0.425%, depending on investments.

Michigan's Education Savings Program boasts very competitive fees and benefits for Michigan taxpayers in the form of state income tax deductions. The initial deposit and subsequent deposits must be at least $25. Investment options include portfolios based on enrollment year or capital preservation (for short time horizons), plus customizable portfolios for more experienced investors.

• Tax benefit: State income tax deduction for Michigan taxpayers of up to $5,000 for single filers and $10,000 for married filing jointly.
• Aggregate contribution limit: $500,000.
• Fees: Annual asset-based fees range from 0.065% to 0.185%, depending on investments.

Whereas many states cap the maximum deduction for resident taxpayers, the Smart529 WV Direct College Savings Plan allows West Virginia residents to deduct their entire annual contribution from their federal gross adjusted income for state income tax purposes.

The plan has a high aggregate contribution limit, at $550,000, and investment options include a modest selection of age-based and risk-based portfolios, plus two individual portfolios.

• Tax benefit: West Virginia residents can deduct up to the full contribution from their adjusted gross income.
• Aggregate contribution limit: $550,000.
• Fees: Total asset-based fees range from 0.12% to 0.21% depending on investments.

Virginia's Invest529 plan offers tax benefits for all state residents, but most notably for residents 70 and older, who can deduct the entire amount they contribute to the plan in one year. Ivest529 offers 20 different investment portfolios, including specialty portfolios like the ESG Core Equity Portfolio, for those concerned about the environmental implications of their investments.

• Tax benefit: State income tax deduction for Virginia taxpayers of up to $4,000; Virginia taxpayers age 70 and up can deduct the entire amount contributed.
• Aggregate contribution limit: $550,000.
• Fees: Asset-based fees on most portfolios are modest but could be as high as 1.11% for specialty portfolios. 

There's no minimum contribution amount to start saving through New York's 529 Savings Program, which boasts very low, straightforward fees. Vanguard is the plan's investment manager. There are 20 different target enrollment portfolios, and investors who would rather create their own investment mix can also choose individual portfolios.

• Tax benefit: State income tax deduction of up to $5,000; up to $10,000 if you're married filing jointly.
• Aggregate contribution limit: $520,000.
• Fees: 0.12% total annual asset-based fee.

Offered through the state of South Carolina, the Future Scholar 529 College Savings Plan has a high maximum contribution limit of $540,000. Residents of the state can take a state income tax deduction up to the amount they contribute for the year (up to the maximum aggregate account balance). Three different investment options are age-based, target allocation, and single-fund.

• Tax benefit: State income tax deductions up to the maximum account balance.
• Aggregate contribution limit: $540,000.
• Fees: Total annual asset-based fees range from 0.00% to 0.20%; no program management fee is charged. 

The Education Plan's college savings program is New Mexico's official 529 plan. New Mexico is among the handful of states that allow its taxpayers to deduct annual contributions up to the 529 account maximum of $500,000. There's also a DIY investment option, which allows you to choose any combination of available portfolios in the plan, or you can opt for an enrollment year-based investment strategy.

• Tax benefit: New Mexico taxpayers can deduct annual contributions up to the account maximum.
• Aggregate contribution limit: $500,000.
• Fees: Total asset-based fees ranging from 0.10% to 0.44%.

Related: How to pay for college: 6 strategies

Even if your state offers a 529 plan, you don’t necessarily have to choose it. You might prefer another state's 529 plan because of its investment options, lower fees, or higher maximum contribution limit.

However, it is always a good idea to check your state's plan first for 529 tax deductions or credits, special benefits, or waived or lower fees.

“If you need help choosing or would like to complement your home state's plan with another, remember you can have more than one account in more than one state's plan for the same beneficiary,” says Roberts. 

There are plenty of plans to choose from, and every state except Wyoming has a plan. 

Several factors, including the costs involved, potential tax benefits, and investment options, must be considered when choosing the best 529 plan.

Even if your state's plan has slightly higher fees, the tax benefits could offset those costs.

You can invest directly with state 529 plans or get guidance from a financial professional on finding the right plan for your goals.

Either way, you’ll need to know your investment objectives (like aiming to cover 50% of the cost of a four-year in-state public school degree), time horizon, risk tolerance, and other factors unique to your situation. 

“A popular option tends to be what is referred to as ‘age-based’ (with a professional investment design based on the beneficiary's age) or ‘target date’ (with a professional investment design based on the year in which the beneficiary is likely to pursue post-secondary education),” says Roberts.

Costs vary by plan and the investment options you select. Fees can include enrollment or application fees, account maintenance, program management, and asset management fees. 

Also, consider whether a 529 plan is direct- or advisor-sold. Many states offer both options. A broker-sold option may provide more guidance in choosing a plan or investments but will involve more fees than a direct-sold plan.

Not all 529 plans allow you to contribute the same maximum amount. 

If you're hoping to maximize a 529 education savings plan, it's worth seeing which plans have the highest contribution limits.

Keep in mind:

You can transfer unused 529 funds to another beneficiary, roll them over into a Roth IRA account (up to annual contribution limits, up to a total of $35,000), or withdraw the funds with a potential 10% tax penalty.

Think you’ll have to invest a lot of time to open a 529? Think again.

To open a 529, you must provide basic information, including details for yourself and the account beneficiary. 

This information may include: 

• Address
• Social Security Number or Individual Taxpayer Identification Number
• Date of birth
• State-issued identification information, such as a driver’s license

Providing these details for a designated survivor is also a good idea.

From there, you'll need to finish setting up your account:

You can open an account with as little as $25. Even better: Anyone can make contributions to the account.

Roberts recommends that friends and family skip the more traditional gifts for birthdays, holidays, and other special occasions and instead contribute any amount to the 529 plan account of a child they love. 

“Friends and family may welcome the suggestion to give a gift that will grow with a child they care about and have a meaningful impact on their future—versus shopping for something that may be quickly outgrown in interest or size,” she adds. 

Many companies now offer education on 529 plans, payroll deduction to these plans (to make it easy to contribute regularly), and even matching contributions to employees' 529 plan accounts. 

“The education and tools offered in the workplace are priceless because two-thirds of Americans are not familiar with 529 plan accounts and, thus, are missing out on one of the best ways to prepare for higher education.”

Fox Money rating

Fixed (APR)

3.69% - 15.21%

Loan Amounts

$2,001* to $400,000

Min. Credit Score

Does not disclose

Overview

Ascent offers several unique borrowing options that you don’t typically see with private lenders. In addition to traditional student loans for undergraduate, graduate, and medical programs, college juniors and seniors may qualify for its Outcomes-Based Loan — which doesn’t require established credit or a cosigner. Instead, Ascent reviews alternate factors such as your school, major, and GPA to determine your eligibility.
 

Ascent also offers a wide range of loan terms and repayment plans to choose from. You may even qualify for its Progressive Repayment plan, which allows you to start with small payments that gradually increase over time. Borrowers who use a cosigner can release them after as few as 12 payments, though international students don’t qualify for this option. 

Interest rates

Fixed or variable

Minimum credit score

Does not disclose

Minimum income

Does not disclose

Loan terms

5, 7, 10, 12, 15, or 20 years

Loan amounts

 $2,001 minimum up to your school’s annual cost of attendance; lifetime limits of $200,000 for undergrads and $400,000 for graduates

Cosigner release

Eligibility

Must be a U.S. citizen or DACA student enrolled at least half time at an eligible institution. International students with a qualified cosigner may also qualify. Applicants who can’t meet financial, credit, or other requirements may qualify with a cosigner.

Fox Money rating

Fixed (APR)

3.74% - 15.49%

Loan Amounts

$1,000 up to 100% of school-certified cost of attendance

Min. Credit Score

Does not disclose

Overview

Sallie Mae offers the Smart Option Student Loan for undergraduate students and a suite of loans for graduate students. You can borrow up to your school-certified cost of attendance and apply just once annually to get the funds you need for the entire academic year. Plus, applying for a Smart Option Student Loan with a cosigner may help you get a better rate. 

Through Sallie Mae, you can find a variety of loans designed for specific needs, including loans for MBA programs, law school, medical school, and health profession programs.

Interest rates

Fixed or variable

Minimum credit score

Does not disclose

Minimum income

Does not disclose

Loan terms

10 to 15 years for the Smart Option Student Loan; 15 years for law school, MBA, and graduate school loans; 20 years for medical school loans

Loan amounts

$1,000 up to school-certified cost of attendance. Student must be listed as the borrower, and a parent may cosign.

Cosigner release

After you graduate, make 12 one-time principal and interest payments, and meet certain credit requirements

Eligibility

Must be a U.S. citizen or permanent resident enrolled in an eligible program. Noncitizens residing and attending school in the U.S. may qualify by applying with a creditworthy cosigner, who must be a U.S. citizen or permanent resident, and providing an unexpired government-issued photo ID.

Fox Money rating

Fixed (APR)

3.74% - 17.99%

Loan Amounts

$1,000 up to 100% of the school-certified cost of attendance

Min. Credit Score

Does not disclose

Overview

College Ave offers a wide range of in-school loans for nearly every type of degree. There are a number of repayment options, and borrowers can choose a unique eight-year repayment term. Plus, graduate, dental, and medical students receive extended grace periods.

You may get easy funding for multiple years — 90% of undergraduates are approved for additional student loans when they apply with a cosigner. However, it can be difficult to remove a cosigner for your loan later on, as you must complete at least half of your repayment term before becoming eligible. That’s significantly longer than some lenders, which may only require one to two years of payments before releasing a cosigner.

Interest rates

Fixed or variable

Minimum credit score

Does not disclose

Minimum income

Does not disclose

Loan terms

5, 8, 10, or 15 years for most borrowers (law, dental, medical, and other health profession students have up to 20 years)

Loan amounts

$1,000 minimum up to your school’s annual cost of attendance; lifetime limits depend on your degree and credit profile

Cosigner release

Available after more than half of the scheduled repayment period has elapsed and other requirements are met

Eligibility

Must be a U.S. citizen or permanent resident at an eligible institution. International students with a Social Security number and a qualified cosigner may also qualify. Applicants who can’t meet financial, credit, or other requirements may qualify with a cosigner.

Fox Money rating

Fixed (APR)

3.98% - 14.22%

Loan Amounts

$1,000 up to cost of attendance

Min. Credit Score

Overview

Education Loan Finance (ELFI) is a division of Tennessee-based SouthEast Bank owned by Education Loan Finance, Inc., a non-profit whose mandate is to provide access to higher education. ELFI launched in 2015 and offers undergraduate, graduate, and parent private student loans as well as student loan refinancing.

ELFI student loans and refinance loans are available to residents in all U.S. states including Puerto Rico. Borrowers can benefit from no application, origination, or prepayment fees. ELFI also offers flexible repayment terms and competitive rates, however there’s no cosigner release option and the lender doesn’t offer any discounts.

Interest rates

Fixed or variable

Minimum credit score

Minimum income

Loan terms

5, 7, 10, or 15 years

Loan amounts

$1,000 - Cost of attendance

Cosigner release

A cosigner may not be taken off a loan, but the borrower can apply for a new loan without their cosigner.

Eligibility

All 50 states as well as Washington DC and Puerto Rico.

Fox Money rating

Fixed (APR)

3.99% - 15.60%

Loan Amounts

$1,000 to $350,000 (depending on degree)

Min. Credit Score

Overview

Citizens offers a variety of student loan types, including loans for undergraduates, graduate students, and parents. Perhaps the most unique feature of Citizens student loans is the option for multiyear approval. If you qualify, you can apply once and borrow for future years with a more streamlined process that only involves a soft credit inquiry.

Student borrowers can defer payments while in school and for six months after graduating. You can also score a 0.25 percentage point reduction on your interest rate for setting up autopay, as well as an additional 0.25 percentage point loyalty discount if you or your cosigner already have a qualifying account with Citizens.

Interest rates

Fixed or variable

Minimum credit score

Minimum income

Does not disclose

Loan terms

5, 10, or 15 years for student loans; 5 or 10 years for parent loans

Loan amounts

$1,000 minimum, up to a maximum of $150,000 for undergraduate and graduate degrees; $250,000 for MBA and law; and $180,000 or $350,000 for health care student loans, depending on the degree type

Cosigner release

Eligibility

Must be a U.S. citizen or permanent resident enrolled at least half-time in a degree-granting program at an eligible institution. International students can apply with a cosigner who’s a U.S. citizen or permanent resident.

Fox Money rating

Fixed (APR)

4.24% - 14.02%

Loan Amounts

$1,000 to $99,999 annually ($180,000 aggregate limit)

Min. Credit Score

Does not disclose

Overview

Powered by Cognition Financial, Custom Choice offers student loans for undergraduate and graduate students starting at $1,000. You can borrow up to $99,999 per year with a total aggregate limit of $180,000.

If you apply with a cosigner, you may be able to release them from your loan after 36 on-time payments. You can also receive a 0.25 percentage point discount on your interest rate by setting up autopay, as well as a 2% reduction of your principal balance after graduating.

Custom Choice doesn’t charge application, origination, prepayment, or late fees. It also lets you pause payments through forbearance if you qualify for its natural disaster or unemployment protection programs. 

Interest rates

Fixed or variable

Minimum credit score

Does not disclose

Minimum income

Does not disclose

Loan terms

7, 10, or 15 years

Loan amounts

$1,000 to $99,999 per year (lifetime limit of $180,000)

Cosigner release

Eligibility

Must be a U.S. citizen or permanent resident at an eligible institution. You must also meet Custom Choice’s underwriting criteria for income and credit, or apply with a cosigner who does. Eligible noncitizens such as DACA residents can also qualify by applying with a cosigner who’s a U.S. citizen or permanent resident.  

Fox Money rating

Fixed (APR)

4.80% - 8.54%

Loan Amounts

$1,001 up to 100% of school certified cost of attendance

Min. Credit Score

Overview

INvested is an Indiana company that offers affordable student loans exclusively to state residents. Loans are available to Indiana students and parents who can meet income and credit requirements, or who have an eligible cosigner. Borrowers can  borrow as little as $1,001 or as much as the school-certified cost of attendance minus other aid.

INvested provides detailed information on eligibility so borrowers can quickly determine whether to apply for a loan — however, there’s no option to prequalify with a soft credit check. Cosigner release is also available after just 12 on-time payments, considerably shorter than many other lenders. 

Interest rates

Fixed or variable

Minimum credit score

Minimum income

Does not disclose

Loan terms

5, 10, or 15 years

Loan amounts

$1,001 minimum, up to the school certified cost of attendance

Cosigner release

Eligibility

Loans are available to Indiana residents only. Borrowers must have a FICO score of 670 or higher, a 30% maximum debt-to-income ratio or minimum monthly income of $3,333, continuous employment over two years, and no major collections or defaults in recent years. Borrowers who do not meet income or credit requirements can apply with a cosigner.

Fox Money rating

Fixed (APR)

5.75% - 8.95%

Loan Amounts

$1,500 up to school’s certified cost of attendance less aid

Min. Credit Score

Overview

Massachusetts Educational Financing Authority (MEFA) is a not-for-profit lender that offers low-cost undergraduate and graduate school loans to students nationwide. While only fixed-rate loans are available, interest costs may be lower than what you see with other private loans.

While you can apply with a cosigner to lock in the best rate possible, removing that cosigner later may be tough. Only one repayment plan allows cosigner release, and you must make four years of consecutive on-time payments and meet other credit and income requirements to qualify. 

Interest rates

Minimum credit score

Minimum income

Does not disclose

Loan terms

10 or 15 years

Loan amounts

$1,500 minimum up to school-certified cost of attendance

Cosigner release

Eligibility

Must be a U.S. citizen or permanent resident, enrolled at least half time at a degree-granting, nonprofit institution, and must maintain satisfactory academic progress. Must have no history of default on an education loan and no history of bankruptcy or foreclosure in the past 60 months. Applicants who can’t meet the minimum credit and income requirements may apply with a cosigner.

Fox Business does not make or arrange loans.

Your state’s 529 plan will generally be the best for you due to the tax breaks offered to resident taxpayers. That said, most states offer 529 plans, and you can use another state's plan if it's better for your savings needs, whether due to a higher maximum contribution limit or different investment options.

A child can be the beneficiary of multiple 529 plans. The maximum balance of each account is limited, and the caps vary by state.

Control of a 529 always remains with the original account owner. You may save the money for a future child of the original beneficiary, as there are no time limits on using these accounts.

“You can use it to pay for other permitted forms of post-secondary education for a child who doesn't want to pursue a traditional four-year degree, save it for a later date in the event they change their mind (as there are no time limits on the use of 529 plan accounts), or switch all or part of the account balance to an eligible family member.

You can also roll over up to $35,000 to a Roth IRA for the 529 plan beneficiary, save it for the child's future children's education, or use it for yourself (if you are a parent or other relative of the child.

 “It’s also possible to take a non-qualified withdrawal and pay only tax on the earnings and a possible 10% federal penalty, unless due to scholarship, military academy attendance, death, or disability,” says Roberts.

We ranked 529 plans based on independent research by CNBC Select and Saving for College and selected the top results based on each of their methodologies; we selected “best for” categories supplemented by weighing each plan’s:

• Management fees
• Investment returns and performance
• Fund expenses
• Investment options
• State-based perks

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