529 plans

Managers of 529 college-savings plans have always competed on fees, but the latest round of the bidding war promises to be the most intense.

Two college-savings companies are borrowing a page from the consumer cash-back loyalty playbook, offering customers rebates on services including refinancing mortgages or opening online bank accounts. Futuretrust, a unit of Destination Maternity Corp., and Upromise Investments have partnered with a series of other financial services companies to offer rebates that can be swept into section 529 college-savings plans.

The Treasury Department has proposed several improvements for Section 529 college savings plans, including the use of age-based index funds and the elimination of home-state biases.

Only 33% of parents are investing in college savings 529 plans, and only 20% of households earning $150,000 or more are taking advantage of them, according to a Gallup survey commissioned by Sallie Mae.

Vanguard Group has just announced it will lower its costs for the 19 investment options in the Vanguard 529 College Savings Plan sponsored by the state of Nevada by an average of 12%.

Half of the parents that OppenheimerFunds recently surveyed don’t believe that college is as affordable as it once was, and 43% have saved less than $5,000 for their children’s college education, and another 13% have saved nothing at all. Only 20% have save $20,000 or more.

Futuretrust Banking Center is offering customers a checking account focused on 529 college savings. The account earns 1%, which is deposited into parents’ 529 college savings plan each month.

Following a three-month investigation, the state of Oregon is seeking $36.2 million in damages from OppenheimerFunds due to steep losses in one of its funds included in the state’s 529 college savings plan; the Oppenheimer Core Bond Fund fell 36% in value last year, and is down another 10% year-to-date.

Five states are examining the underlying investment offerings in OppenheimerFunds’ 529 plan after two of the funds lost substantial amounts over the past year: the Oppenheimer Champion Income Fund is down 79%, and the Oppenheimer Core Bond Fund is down 41%.

Barclays Global Investors has hired Stephen Jobe as director of its iShares 529 programs.

More states are offering conservative options in their 529 plans, some, such as Utah, even now including FDIC-insured savings accounts. Unlike other states’ bank-deposit products, Utah doesn’t require a minimum contribution.

With the market continuing its declines, many parents are looking to lock in tuitions through prepaid 529 options, which are available in 12 states, The Wall Street Journal reports.

Fidelity Investments has created a credit card in partnership with American Express that allows customers to transfer rewards from retail purchases to their individual retirement accounts.

With the markets tumbling, a recession on the horizon and people growing increasingly fearful of losing their jobs, more parents are delaying saving for their children’s college education, Investment News reports. Sales of 529 plans fell 33% in the first six months of the year to $6.3 billion, down from $9.8 billion a year earlier.

West Virginia and Nebraska offer the best 529 college savings plans, according to a ranking by SavingforCollege.com, a unit of Bankrate Inc., set to be released Friday.

The deadline for entries to Money Management Executive’s Sixth Annual Fund Operations Awards has been extended through Thursday, July 31, so you still have plenty of time to enter.

Balancing saving for college and retirement has grown increasingly difficult in the recent generation, according to a research paper from Putnam Investments. The paper, called “College or Retirement? How to Calance Two of Life’s Biggest Savings Goals,” indicates a variety of reasons for this dilemma concerning families throughout America.

A shocking lack of financial knowledge by our nation’s teenagers has caused a junior achievement organization and an association of retired teachers to band together to help bridge this gap.

Friends and family members of New York college-bound students can now make contributions to a student's 529 college savings plan, thanks to a change in New York State law that mirrors similar programs in other states.

Iowa has launched a “Baby 529 College Savings Giveaway” program in which it will randomly award $1,000 in money toward a 529 plan to one baby a month at participating Iowa hospitals. Every family that registers their child, however, will also receive a small “welcome home” gift, courtesy of Iowa State Treasurer Michal L. Fitzgerald.