State 529s Add Index Funds, Cut Fees

State 529 college savings plans are becoming more price sensitive, most likely in response to regulators’ growing concerns over mutual fund fees and an awareness that most 529 investors are do-it-yourself’ers who are searching for low fees, The Wall Street Journal reports.

Ohio has added 15 Vanguard index options, while Indiana and Louisiana have added low-cost funds and Wisconsin changed its pricing structure to benefit 519 investors in index funds.

Most state requests for proposals (RFPs) from fund companies now emphasize fees and expenses, said Joseph Hurley, founder of savingforcollege.com. "There’s a very strong desire among states to minimize the expenses, particularly in their direct-sold programs," Hurley told The Journal.

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