College Savings Plan Assets Grew 6.8% in Q4 of 2005

May 5, 2006 (PLANSPONSOR.com) - The assets of all Section 529 plan programs, which are meant to help pay for higher education, climbed 6.8% to $82.6 billion in the fourth quarter of 2005, according to recent statistics.

The statistics from the Investment Company Institute show that of the two federal tax-free plans, the savings plans are still the most widely used, making up $68.7 billion of Section 529 plans, an increase from the previous quarter by about $5.1 billion, and prepaid plans totaled $13.9 billion.

Prepaid tuition plans are college savings plans that are guaranteed to increase in value at the same rate as college tuition, meaning if someone purchases shares worth one year in tuition at an in-state college, the shares will keep pace with tuition even if it doubles. Savings plans are tax-free accounts that are subject to market fluctuations.

The number of plans of also increased by 3.9% to about 8.2 million, with the number of prepaid plan accounts reaching 2 million and savings plans, 6.2 million.

For state-by-state figures for Section 529 plan programs go here .

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