Average balances in 529 college savings plans fall far short of projected higher education costs in most situations, according to Morningstar’s latest research paper and industry survey, released on Monday.

The average 529 account balance was $9,700 in March 2009, according to data that Morningstar culled from the Investment Company Institute. The College Board estimates that amount would cover one year of in-state tuition at a public university, estimated at $7,020. Stacked up against the annual cost of an out-of-state public school, $18,548, or a private institution, $26,273, and the shortfall looks even more severe.

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