Making the ’MOST’ of funds

As state assistance to public higher education continues on a downward trend, finding ways to save for an increasingly expensive degree becomes more vital.

A couple decades ago, state appropriations accounted for 70-plus percent of a university’s operating budget. The percentage has dipped below 50 percent and students are making up the difference in tuition and fees. Despite a couple of years of tuition being held flat across the state, a semester at a public university in Missouri can cost a student $7,000 or more in tuition and room and board.

Higher education administrators in Missouri continue to find ways to keep their academic programming afloat while financial commitment from the state decreases. Schools took an appropriations cut of 5.2 percent for the coming school year and likely will face bigger challenges next year. Meanwhile, Missouri ranks near last in per-capita spending on public higher education.

State Treasurer Clint Zweifel offered a small glimmer of hope Monday when his office announced reduced expenses in the state’s college savings plan called MOST 529.

The tax-advantaged savings plan allows an individual to invest in a fund that is strictly for higher education purposes. Family and friends can contribute, but the funds are always in control of the person who opened it. The fund has 11 Vanguard investment options. The expenses associated with the program were recently lowered, saving a total of approximately $900,000 per year. The program has 110,000 account owners representing investments of about $1.3 billion.

Even before the fees were lowered, Dan Danford, an investment adviser and member of the Missouri Western State University board of governors, said the MOST program was one of the best investments choices in planning for college. He recommends it to parents and grandparents.

“They like to fund education,” Mr. Danford said. “At the same time, they don’t want the money they set aside to be used to buy a new car when the kid turns 18 or 19 years old.”

But the lack of flexibility in the program prompts Mr. Danford to suggest in addition to MOST, a more traditional family savings plan that can be accessed should an opportunity present itself — such as buying a home or investing in a business.

“I’m surprised sometimes at how little preparation people put into higher education expenses,” he said, adding that some parents wait until a students senior year in high school before considering how to pay for college.