Price-managed 529 college savings plan gets downgrade
The state college savings plan managed by T. Rowe Price Group has been downgraded by ratings agency Morningstar Inc. from gold to silver.
Morningstar released its analyst ratings Tuesday for 63 of the largest 529 college savings plans, the state- or educational institution-sponsored plans designed to help set aside money for college. The Maryland College Investment Plan, which has about $4.5 billion in assets, was one of six plans downgraded in Morningstar’s 2016 report.
The Baltimore money management firm’s 529 plan in Alaska was also downgraded from gold to silver.
While Morningstar analysts no longer felt the plan deserved a gold rating, “the truth is it’s still a really good plan,” said Leo Acheson, Morningstar’s lead research analyst for 529 college savings plans.
Morningstar uses a five-tier rating system with three positive levels — gold, silver and bronze — plus neutral and negative, to help families saving for college compare options.
“We are pleased to see Morningstar recognize our 529 plans as ‘among the best options in the 529 space’ and proud to have received one of Morningstar’s highest ratings for the seventh year in a row,” said Tom Kazmierczak, head of T. Rowe Price Individual Investors Products & Services, in a statement.
Plans are evaluated based on the design of their investment options, their underlying money managers, how they are administered by their parent firms, whether the investments are a good value, and the plan’s risk-adjusted performance.