Many of Oregon’s colleges and universities have struggled to get enrollment numbers back up after more than two years of the pandemic, but families across the state are still investing in college for their children.
According to the latest figures from the Oregon State Treasury, families of future students have continued to save for college at record rates using the Oregon College Savings Plan.
The state-sponsored college savings program, also known as a 529 plan, started in 2001. The plan gives families, and future students, low-cost investment options to put away money and spend it tax-free on college expenses like tuition and books.
“We’ve been in business now for more than 20 years, and we went from zero assets way back then to just a shade over $2.6 billion in assets as of today,” said Michael Parker, executive director of the Oregon 529 College Savings Network. “That’s right around 155,000 investors.”
Parker said contributions vary from year to year, but he saw a spike in contributions during the pandemic.
“During the height of the COVID years is when we saw, interestingly, our biggest gross contribution numbers,” he said.
Last year, the savings plan brought in a record $297 million in contributions.
Parker said it’s unclear why that spike happened, but it may have been from families who had saved money they would have previously spent on traveling or other expenses that halted the last few years.
Whatever the reason, Parker said the OCSP was able to lower its administrative fee from 0.25% to 0.20%. That will allow a greater percentage of contributions to go directly to college expenses.
With those high contributions and lowered fees, the Oregon State Treasury announced on Tuesday the OCSP has received a “best-in-class” silver rating from Morningstar, Inc. — a financial services company. Parker said this is the third year the plan has held that distinction.
“Ensuring that higher education is accessible and affordable for all families remains our top priority. Lowering fees is an important step in making it easier for all Oregonians to be able to save for their higher education,” said State Treasurer Tobias Read in a statement. “We are encouraged by this recognition from Morningstar, which acknowledges our work to enhance our savings options and lead in this space.”
Parker said the OCSP typically sees anywhere between $230 and $260 million in gross contributions every year. As of this month, this year’s contributions are at about $230 million.
Though the program has seen growing contributions, Parker said the program has also seen growing distribution — meaning that more families are using the money they have invested over the years to send students to college.
For this year, as of the end of November, the program has distributed $170 million to students for college expenses.
“We’re seeing our distributions increase every year, which really means a healthy program because people are contributing, but now they’re actually using those dollars to help their kids go to school,” Parker said.