Skip to Content
Special Report

Morningstar's Guide to College Savings

What you need to know about college savings options, from 529 plans to Coverdells to Roth IRAs.

College savers are investing for a critical goal and a fixed time frame. Given the high financial and emotional stakes involved in choosing and paying for college, investors should feel confident about their choice of savings vehicle and investment options.

In this guide, you'll find what you need to know about college-savings options in terms of their tax treatment and their effect on financial aid eligibility. We'll also help you figure out how much to sock away to reach your goal, and how to take that first step to set up a plan and start saving.

Much of our content is devoted to 529 plans, which have become popular vehicles for college savings because they allow a significant amount of money to be saved, and they have money-saving tax advantages. We answer frequently asked 529 questions and tick off the main considerations that should drive your 529 plan selection. We've also included our complete list of 529 plan ratings to help you home in on the best option for your situation.

The Basics

A Guide to Your College-Savings Options
We compare and contrast a few of the most common college savings vehicles.

How to Allocate Asset for College Savings
Families must contend with competing challenges: steep glide paths and high inflation.

How Much Should You Save for College?
Uncertainty surrounding cost inflation and investment performance makes it difficult--but not impossible--to estimate how much you should save.

Can I Use a Roth IRA to Pay for College?
Here are the pros and cons of using Roth IRAs for college savings.

What Is a 529?
We take a close look at these popular college-savings accounts. 

529 Plans

Getting Started with a 529 College-Savings Plan
If setting up a college savings account is on your to-do list, here are some tips for getting going.

For Most College Savers, Prepaid 529 Plans Don't Make the Grade
Investment in prepaid 529 plans continues to decline, and in many cases it's not hard to see why.

A Primer on Prepaid 529 Plans
Here's how these vehicles differ from conventional 529 plans and what each state has to offer.

Rating the Top 529 College Savings Plans
We upgrade nine plans and downgrade eight, shaking up our Gold and Silver ratings.

The Cost of Not Saving Early for College
What do college savers miss when they put off investing in a 529 plan?

College Savings Plans Get Graded
Learn which states' plans are excelling and which go to the back of the class.


College Aid

Why You Should Fill Out the FAFSA (Even If You Think It's a Waste of Time)
The FAFSA for the 2019-20 school year is available. Put it on your to-do list.

Students, Here's How to Make the FAFSA Application As Easy as Possible
Tips from a prior first-generation student.

Taking a Loan to Pay for Kids' College? Read This First
Data shows that more parents are taking out loans for college funding. We take a look at the pros and cons of different funding sources.

Morningstar's Student Loan Calculator
Use our new tool to determine how much student loan debt is affordable for your student.

5 Misconceptions About College Aid
Don't disregard the FAFSA when planning how to pay for college.

For Advisors

How Advisors Can Help Clients Think About 529 Plan Benefits and Disadvantages

Are 529 Plans Worth It? Why 529 Plans Are Right for Some Families and Not Others

 

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.