New York cuts fees in half for college savings plan

New Yorkers who participate in the state's 529 college savings direct plan will see their fees cut by almost 50%.

The direct plan's total annual asset-based fee declined to 0.25% from 0.49% starting Aug. 29, according to the comptroller's office. The reduction means plan participants could save almost $20 million annually. The reduced cost also makes New York's fees are among the lowest for directly sold 529 plans.

The New York plan offers investors 16 investment choices from Vanguard, including three that change the investment mix as beneficiaries near college. Account fees for age-based options, which are the most popular nationwide, range from 0.20% to 2.27%.

The Vanguard Group is the investment manager for New York's 529 college savings direct plan and Upromise is the program manager. The plan is the nation's largest college savings program directly sold to investors, with more than $8 billion invested in 500,000 accounts.