ScholarShare 529 College Savings Plan

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ScholarShare 529 celebrates 20-year anniversary with gold Morningstar analyst rating

Morningstar upgrades ScholarShare 529, recognizes it among the top four college savings plans
Oct 24, 2019

Sacramento, Calif. – ScholarShare 529, California’s official college savings plan, announced today that it earned a Gold Morningstar Analyst Rating for college savings plans and that it is celebrating its 20-year anniversary since the plan’s founding in October 1999. Morningstar, a leading provider of independent investment research, awarded only four plans a Gold rating for their low costs, strong stewardship, and exceptional investment options. The firm upgraded ScholarShare 529’s 2018 Silver rating, acknowledging the plan’s age-based portfolios as a key differentiator.

“California ScholarShare College Savings Plan continues to stand out for low costs, and its forward-looking overseers should continue to keep the plan at the forefront of industry best practices,” Morningstar noted. Morningstar also highlighted ScholarShare 529’s age-based portfolios, explaining, “We upgraded the rating for California’s ScholarShare College Savings Plan to Gold in 2019, as its board voted to move to its age-based portfolios to a progressive glide path in February 2020. That’s an industry best practice, as it smooths the transition from stocks to bonds and reduces the risk of making a large shift out of equities just after a market dip, when there’s the potential to lock in losses.”

“We are extremely proud of this Morningstar recognition, and it is fitting that it coincides with our 20th year of helping Californians achieve their college savings goals,” said Julio Martinez, executive director of the ScholarShare Investment Board, which administers the ScholarShare 529 plan. “This represents ScholarShare 529’s seventh consecutive annual recognition from Morningstar as one of country’s best options for college savers. The Gold Morningstar rating epitomizes ScholarShare 529’s 20-year history and underscores our ongoing commitment to empowering California families to save for college in the most effective ways to afford higher education.”

Key milestones during ScholarShare 529’s 20-history include:

  • 1999: The Golden State ScholarShare College Savings Trust is launched.
  • 2001: Withdrawals from 529 plans are considered free of federal taxes as a result of Congress improving 529 rules.
  • 2009: The ScholarShare Investment Board (SIB), which administers the ScholarShare 529 plan, approves major fee reductions, making ScholarShare 529 one of the nation’s lowest-cost plans.
  • 2013: Morningstar awards ScholarShare 529 a silver medal in its annual evaluation, making ScholarShare 529 one of the nine highest-rated plans in the country. The plan goes on to earn silver awards four of the next five years.
  • 2016: Plan assets top $7 billion as Californians begin saving more than ever for college.
  • 2019: ScholarShare earns a Gold Morningstar Analyst Rating for college savings plans and celebrates its 20-year anniversary. Fiona Ma, CPA, is sworn in as the California State Treasurer, and quickly prioritizes college savings. More than 20,000 new ScholarShare 529 accounts are opened so far this year, bringing the total number of accounts to more than 327,000. Plan assets approach $10 billion, and nearly $3 billion of qualified withdrawals are made for higher education since plan inception.

In an annual review (10/22/2019) of the largest 529 college savings plans (62 total), Morningstar identified 30 plans that rose above their typical peers, awarding those plans Gold, Silver, and Bronze Morningstar Analyst Ratings for 2019. These forward-looking, qualitative ratings signal Morningstar’s conviction in the plans’ abilities to outperform their relevant benchmark and peer groups on a risk-adjusted basis over the long term. Morningstar evaluates college savings plans based on five key pillars – Process, Performance, People, Parent, and Price. For more information about Morningstar’s overview of ScholarShare, go to www.morningstar.com. Past performance does not predict future results. Source: Morningstar.com.

Tax Benefits, Strong Investment Returns and Competitive Fees
Saving for college using ScholarShare 529 is potentially worth thousands of dollars to savers because any growth is tax-free, which can potentially translate to 25 percent more money for higher education. In addition to tax benefits, ScholarShare 529 has a strong track record of investment returns and competitive fees, which helps savers potentially earn higher investment returns – and keep more of those returns – than they would investing in a lower-performing, higher-fee 529 college savings plan.

Learning Sound College Saving Strategies

In addition to its benefits for college savers, ScholarShare 529 educates Californians about maximizing their college savings strategies, sharing research designed to empower California families to save for college in smart ways that provide the best chance to attend and afford college. Visit www.CollegeSavingsMistakes.com to learn more.

For more information about ScholarShare 529, visit www.ScholarShare529.com. Click here for more information about the 2019 Morningstar Analyst Ratings for college savings plans.

About ScholarShare 529
ScholarShare 529, a Gold-rated college savings plan by Morningstar, serves as California’s official college savings plan. Administered by the ScholarShare Investment Board, ScholarShare 529 provides families with a valuable tool that offers a diverse set of investment options, tax-deferred growth, and withdrawals free from state and federal taxes when used for qualified higher education expenses, such as tuition and fees, books, certain room and board costs, computer equipment, and other required supplies. ScholarShare 529 manages over $9.4 billion in plan assets across more than 327,000 ScholarShare 529 accounts as of 9/30/19.

To open a ScholarShare 529 account or get more information about the plan, visit www.ScholarShare529.com. For information about the ScholarShare Investment Board, visit www.treasurer.ca.gov/scholarshare, like ScholarShare 529 on Facebook at www.facebook.com/scholarshare529, and follow them on Twitter at @ScholarShare529.


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