House Financial Services Subcommittee Chairman Richard H. Baker (R-LA) will chair hearings of The House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises Wednesday to determine whether 529 college savings plans are potentially gouging investors with excessive fees.
"There are few more important matters facing American parents than saving and investing for their child's education, so it's important to make sure that a program that gives parents greater opportunities and incentives to plan ahead and also includes all the facts they need to make informed choices," Baker said.
Baker previously noted concern that the uneven playing field of states that endorse 529 plans lacks the consistency of fee disclosure required by the mutual fund industry. The fast-growing 529 industry is on pace to exceed $58 billion in assets this year and $300 billion by 2010.
Financial Services Committee Chairman Michael G. Oxley (R-Ohio) first raised the issue of regulating 529 plans in a Feb. 4 letter to Securities and Exchange Commission Chairman William Donaldson, which triggered the development of a new task force aimed at analyzing these types of investment vehicles. In his letter, Oxley said, "The value of a college education cannot be measured, but parents do have to calculate the costs. Our goal should be to increase transparency and to clarify the regulatory oversight. For most parents, investing in a child's future is too important to be left to ambiguous fees, inadequate disclosures, and unclear regulations."