With college costs ever rising, parents are always looking for ways to make sure they have enough money put away so their kids can get an education.
One way to do that is to invest in 529 plans, where the gains on the plan's investments are tax free when used for qualified educational purposes.
529 plans were added to the IRS code more than 10 years ago, with assets in 84 plans nationwide now totaling $200 billion. In 2013, the plans grew 20% over the prior year.
Morningstar recently released an industry report on the 84 plans, including direct-sold and advisor-sold plans, with the total of 529 plans split nearly evenly between the two types. Each was assigned to the Gold, Silver, Bronze or Negative category.
The plans were ranked in these five areas: Process, Performance, Price, Parent and People. To get rated as Gold, for example, Morningstar says the plans must meet the "highest-conviction recommendations and stand out as best of breed for their ability to help college savers meet their goals."
(Related: 30 Best Paying College Majors: 2014)
We've listed the plans that merited the top two ratings and those that were deemed to be at the bottom. Of course, the vast majority received a Neutral rating.
We've included the rankings by state in terms of 529-plan assets under management. Virginia, with more than $46 billion in assets under management, has by the far the highest level of assets when it comes to college savings.
Check out the Best and Worst 529 College Savings Plans:
THE BEST 529 COLLEGE PLANS
1. Maryland College Investment Plan Direct
Rating: Gold
Program Manager: T. Rowe Price
State's Total 529 AUM: $3.8 billion/Rank: 18th
2. T. Rowe Price College Savings Plan Direct – Alaska
Rating: Gold
Program Manager: T. Rowe Price
State's Total 529 AUM: $6.07 billion/Rank: 10th
3. The Vanguard 529 College Savings Plan Direct – Nevada
Rating: Gold
Program Manager: UPromise Investments
State's Total 529 AUM: $12.7 billion/Rank: 3rd
4. Utah Educational Savings Plan Direct
Rating: Gold
Program Manager: Utah Educational Savings Plan
State's Total 529 AUM: $6.7 billion/Rank: 7th
5. CollegeAdvantage 529 Savings Plan Direct – Ohio
Rating: Silver
Program Manager: Ohio Tuition Trust Authority
State's Total AUM: $7.7 billion/Rank: 5th
6. CollegeAmerica Advisor – Virginia
Rating: Silver
Program Manager: American Funds
