The College Savings Foundation released a report conducted by Financial Research Corporation which found that assets in 529 college savings plans rose to an estimated $75.1 billion at the end of the first quarter of 2006, up 38% from $54.5 billion in the same quarter one year ago.
Estimated net sales during the 2006 first quarter were $5.1 billion, the largest single-quarter-net-sales-total on record. "This drastic escalation in college savings plan assets illustrates the buoyant demand on the part of American families for tax-advantaged college savings vehicles," said David Pearlman, chairman of the Foundation, in a statement.
The permanency of 529 plans remains a looming issue on Capitol Hill. Robert Glauber, chairman and CEO of NASD, said the NASD and the MSRB, which regulate 529 plans, are working together to "erase" the fact that sales of mutual funds and 529 plans are governed by different sets of rules written by different regulators.
According to The College Board, the average annual total cost of attending a four-year public college has increased 6.6% to $12,127 in 2005-2006. The average annual cost of a private four-year university jumped 5.7% to $29,026.
(Investment Advisor's annual listing of 529 plans will appear in the August 2006 issue.)--Ryan G. Murphy