Assets in 529 college savings plans reached $40 billion at the end of the first quarter, according to data from Financial Research Corp., released by the College Savings Foundation. This marked a 13.9% increase from $35.1 billion in assets at the end of 2003 and an 87.5% increase from $21.3 billion in assets in the first quarter of 2003.
Chuck Toth, chairman of the foundation, remarked on the growing popularity of 529 plans. "Ongoing strong asset growth in the 529 savings plan market offers evidence that investors and families increasingly view the 529 as an essential element of an effective, long-term strategy for managing the burgeoning costs of higher education."
The College Savings Foundation expects 529 sales to continue to grow, particularly as education costs accelerate.
"Financial services providers with a strong advisory orientation see the 529 as a tool for creating even greater value for clients in the context of long-term relationships," added Whitney Dow, director of education savings research at FRC.