College Savings Plans

[umterp1999]

I know college savings plans are a bit controversial in this forum, however, my wife and I think this is the way we want to go for our newborn.  I'm starting to learn about fund fees and their effect on returns.  I would like some feedback on the plan offered in my state.

The fund that I am considering is a 529 plan and has a 10.00 annual fee, and underlying expenses of .67%.  Total Annual Assett Fees of .87%.   If I use this plan that is offered by my state of residence (Maryland) I qualify for a state tax deduction of up to 2500.00.  If I go to another state's fund, I may find lower fees, but will not qualify for the tax deduction.  While the funds expenses seem high, I think it's offset by the tax deduction.  What are some thoughts about this?

[Undecided]

My state offers a similar deal---use our plan and take a deduction---and the fees are also a bit higher than the plan we used when we lived in a different state. So we make the contribution to an account under our state's plan and are planning to roll over the balance to our other account (under a different state's plan) periodically.

[umterp1999]

Gotcha.  That's what we were thinking too.  Thanks.

[Bigote]

I would do the same.    Also, if you plan on contributing more than 2500 in a year, then max out the state deduction then deposit the rest directly into a better plan (like NY or one of the other low fee, VG run plans).