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SAVINGS, INVESTMENT & DEBT OWNERSHIP |
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EDUCATIONAL SAVINGS PLANS AND LOANS
To encourage households to save for college education, states have developed Section 529 college savings plans, named after a part of the Internal Revenue tax code that allows earnings to accumulate free of federal income tax and to be withdrawn taxfree to pay for college costs. Slow to gain acceptance initially, these plans are now growing rapidly. By the end of 2002, all states had such plans in operation. There are two types of plans: savings and prepaid tuition. Plan assets are managed either by the state’s treasurer or an outside investment company. Most offer a range of investment options.
| - There were 10.6 million 529 plan accounts in 2007, compared with 6.0 million in 2003, according to the National Association of State Treasurers.
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NUMBER OF AND DOLLARS INVESTED IN 529 PLAN ACCOUNTS, 2003-2007
Source: National Association of State Treasurers.
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TOP TEN 529 SAVINGS PLAN PROVIDERS BY ASSETS, 2007
($ billions, end of year)
Rank |
Provider |
Assets |
| 1 | American Funds | $25.2 |
| 2 | Vanguard | 17.6 |
| 3 | Fidelity | 14.6 |
| 4 | Alliance | 8.4 |
| 5 | Merrill Lynch | 5.5 |
| 5 | Putnam | 5.5 |
| 7 | T. Rowe Price | 4.8 |
| 8 | TIAA-CREF | 4.7 |
| 9 | Oppenheimer | 4.3 |
| 10 | Legg Mason | 2.5 |
| | Top 10 Providers | $93.1 |
| Source: National Association of State Treasurers. |
| - The top 10 providers accounted for 72 percent of 529 plan assets in 2007.
- Vermont is the top state for 529 plans, with $27.8 billion in assets under management, followed by Rhode Island ($8.4 billion), New Hampshire ($8.0 billion), New York ($7.9 billion) and Florida ($6.6 billion).
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FEDERAL STUDENT LOANS
The U.S. Department of Education administers the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan (Direct Loan) Program. Both the FFEL and Direct Loan programs consist of Stafford Loans (made to students) and PLUS Loans (made to students' parents). Schools generally participate in either the FFEL or the Direct Loan program but sometimes participate in both. Under the Direct Loan Program, the funds for student loans come directly from the federal government. Funds for FFEL student loans are guaranteed by the federal government but are made by banks, credit unions or other private lenders participating in the program.
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TOP 20 PRIVATE LENDERS OF FEDERAL STUDENT LOANS, 2007 (1)
($ millions)
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New guarantees |
Rank |
Lender name |
Fiscal year 2006 |
Fiscal year 2007 |
| 1 | SLM Corporation (Sallie Mae) | $6,961.7 | $9,002.3 |
| 2 | Citibank, Student Loan Corp. | 3,871.3 | 4,764.3 |
| 3 | Bank of America | 2,897.4 | 3,261.6 |
| 4 | JPMorgan Chase Bank | 1,574.7 | 3,064.7 |
| 5 | Wells Fargo Education Financial Ser. | 2,653.6 | 2,954.8 |
| 6 | Wachovia Education Finance Inc. | 2,573.9 | 2,934.5 |
| 7 | College Loan Corporation | 1,414.9 | 1,493.3 |
| 8 | U.S. Bank | 1,159.2 | 1,332.5 |
| 9 | Edamerica | 1,087.0 | 1,303.7 |
| 10 | Access Group | 935.7 | 1,124.9 |
| 11 | Northstar Guarantee | 836.9 | 1,062.1 |
| 12 | Student Loan Xpress | 804.8 | 1,020.5 |
| 13 | Suntrust Bank | 834.4 | 948.3 |
| 14 | National Ed Loan Network (Nelnet) | 767.8 | 891.5 |
| 15 | Pittsburgh National Corp. (PNC) | 852.0 | 838.9 |
| 16 | Citizens Bank | 663.5 | 716.0 |
| 17 | College Foundation Inc. | 627.6 | 662.2 |
| 18 | Regions Bank | 242.9 | 647.1 |
| 19 | AES/PHEAA | 601.5 | 624.1 |
| 20 | Fifth Third Bank | 99.2 | 567.2 |
(1) Includes Stafford (FFEL and Direct) and PLUS (FFEL and Direct) Loans.
Note: Does not include direct federal government loans.
Source: National Student Loan Data System. |
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