College-Savings Plans Industry Survey

Transcription

1 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April College-Savings Plans Industry Survey Contents 2 Overview 7 Process 10 Performance 18 Price 34 People 40 Parent 56 Morningstar Analyst Ratings Executive Summary College savers are continuing to invest in 529 college-savings plans at an impressive clip, even though their performance has lagged that of similar mutual funds in recent years. Higher expenses are likely to blame for much of the performance shortfall: Static 529 investment options expense ratios are often more than 20 basis points higher than similar mutual funds. Those higher costs significantly raise 529 plans performance hurdle each year and mute the success of what are otherwise often experienced, well-regarded management teams. In the end, however, 529 plans tax benefits should theoretically make up for much if not all of the shortfall. Laura Pavlenko Lutton Director, Fund of Funds Research; Editorial Committee Chair [email protected] Kailin Liu Fund Analyst Fund of Funds Research [email protected] Key Take-Aways 3 Assets in 529 plans grew by 25 in 2012 to $166 billion, exceeding standard index gains for the year. 3 Direct-sold 529 plans continue to gain market share at the expense of advisor-sold plans plans featuring managers from multiple firms have not shown a significant performance advantage over plans that include investments from a single asset manager. 3 Traditional open-end mutual funds have outperformed 529 investments over the past five years. Age-based 529 options also have trailed their blended benchmarks. 3 3 The three plans with the best overall risk-adjusted returns are Maryland College Investment Plan, T. Rowe Price College Savings Plan, and New York s 529 Program (Direct). The managers running 529 plans investment options are relatively experienced, and none of the strategies with ratings receive negative People ratings from Morningstar. 3 Morningstar has identified 27 plans that it expects to outperform on a risk-adjusted basis after tax benefits over a full market cycle. These plans earn Morningstar Analyst Ratings of Gold, Silver, or Bronze.

2 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 2 of 59 Overview Assets in 529 college-savings plans have been steadily growing, with plans marketed directly to college savers gaining over those sold through financial advisors. At year-end 2012, the plans assets topped $166 billion a 25 increase in assets over the year-earlier figure. (The total does not include assets of prepaid college-tuition plans, which are a different form of a 529 plan.) The industry s growth rate represents organic growth beyond standard market gains. In 2012, the S&P 500 Index gained 16.0 while the Barclays US Aggregate Bond Index was up 4.2. Direct-sold plans assets were $85.1 billion with a market share of 51, while advisor-sold plans assets totaled $81.8 billion, representing a 49 market share on Dec. 31, More than two years earlier, on Sept. 30, 2010, advisor-sold plans market share was 3 4 percentage points higher than the direct-sold plans market share, with assets totaling $61.8 billion and $57.4 billion, respectively. It s unclear why direct-sold plans are gaining assets at a faster rate than advisor-sold plans, but the trend may reflect the rise of registered investment advisors and the decline of traditional brokers. RIAs often are compensated by clients who pay a percentage of their portfolio s total assets to the advisor each year or have other fee-based compensation arrangements. Brokers, on the other hand, usually are paid commissions on the investments they buy and sell on the clients behalf. RIAs may be more likely to invest in direct-sold 529 plans on behalf of their clients because such plans tend to charge lower fees. (For more on 529 plans expenses, see the Price section of this paper.) What s more, a handful of direct-sold 529 plans, including Utah Educational Savings Plan and SSgA Upromise 529 Plan, specifically target RIAs in their marketing materials and investment offerings. Exhibit Plans Total Assets by Direct-Sold and Advisor-Sold Plans Data through 12/31/12. Source: Morningstar, Inc. Advisor-Sold Direct-Sold 119,236,920,231 61,814,024, ,102,068,506 67,340,733, ,890,840,765 81,793,226, Bil USD 57,422,896, ,761,334, ,097,614, /30/ /31/ /31/2012

3 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 3 of 59 Conservative-Allocation Options Attract New Cash In addition to collecting 529 plans total assets under management, Morningstar also tracks flows into its 529 categories for static investment options. These options are composed of either single asset classes (such as U.S. large growth) or static asset allocations that remain stable. In contrast, age-based options those aimed at beneficiaries of a particular age or college enrollment year shift their asset allocation over time, away from stocks and toward bonds and cash. As was the case in 2011, conservative-allocation options have gained the most new cash from college savers over the near term and long term, bringing in more than $1 billion over the past 12 months through Jan. 31, 2013, and about $3.5 billion over the five-year period. Broadly speaking, the categories with more-volatile risk profiles fared worst when it came to flows over the past year. Aggressive allocation, large growth, mid-cap equity, and small-cap equity posted the slimmest positive flows of less than $36 million each; non-u.s. equity funds saw outflows, with college savers withdrawing $38.7 million from those investment options. This may represent general risk-aversion among college savers, but it may also reflect a natural movement toward cash- and bond-heavy investments that occurs as beneficiaries get closer to their collegeenrollment dates and college savers dial down their exposure to risk to better protect their nest eggs from market fluctuation. 529 Assets by State Individual states sponsor 529 college-savings plans, and some states have several plans, while others have none. The commonwealth of Virginia has the largest plan by assets under management; it is home to the nation s largest 529 plan, the advisor-sold CollegeAmerica with $35.5 billion of assets as of Dec. 31, Including Virginia s much smaller $2.1 billion direct-sold plan, the state Exhibit 2 Cash Flows to Static 529 Categories Data as of 1/31/13. Source: Morningstar, Inc. Morningstar Category Summary Flows USD 1-Year Summary Flows USD 3-Year Summary Flows USD 5-Year US 529 Static Conservative Allocation 1,039,023,966 2,726,160,588 3,460,132,189 US 529 Static Intermediate Bond 843,141,056 2,205,500,183 3,347,342,248 US 529 Static Moderate Allocation 745,469,397 2,189,151,843 3,153,168,969 US 529 Static Large Blend 278,516,659 1,121,749,741 2,068,001,492 US 529 Static Money Market 225,743, ,136,512 1,174,864,082 US 529 Static Short-Term Bond 207,305, ,568,356 1,229,472,733 US 529 Static US Government 106,299, ,958, ,356,464 US 529 Static Large Value 60,576, ,216, ,154,943 US 529 Static Small-Cap Equity 35,617, ,466, ,063,944 US 529 Static Mid-Cap Equity 27,204, ,337, ,445,355 US 529 Static Large Growth 24,972, ,799,933 1,206,160,662 US 529 Static Aggressive Allocation 22,952, ,655,788 1,123,191,792 US 529 Static Non US Equity 38,706, ,148,233 1,669,257,882

4 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 4 of 59 controls roughly $37.6 billion more than one fifth of the nation s 529 college-savings plan assets. There s a sizable gap between Virginia s asset base and that of the next-largest competitor, New York, which has $14.2 billion in assets. New York s assets, however, are primarily in the state s direct-sold plan, with $11.9 billion of assets. Less-populous states have garnered significant 529 market share by offering several plans that are marketed nationally. This is the case with Nevada, home to four 529 plans that collectively have $10.1 billion of assets, mostly in directsold plans. Tennessee has the smallest asset base, partly because it only launched a direct-sold plan in September Tennessee had been without a 529 plan for several years, instead encouraging state residents to invest in Georgia s plan. The new plan taps the investment menu available through the state s retirement-plan administrator and includes a set of 529 investment options that are not widely available elsewhere.

5 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 5 of 59 Exhibit Plan Assets by State, Distribution Channel Arizona and Tennessee data as of 01/31/2013. Other data as of 12/31/2012. Source: Morningstar, Inc. State Total State Assets USD Advisor-Sold Assets USD Advisor-Sold Assets Direct-Sold Assets USD Direct-Sold Assets Alabama 926,015, ,866, ,149, Alaska 5,010,968,677 3,278,120, ,732,848, Arizona 651,849, ,521, ,328, Arkansas 394,591, ,750, ,841, California 4,710,143, ,710,143, Colorado 4,513,354,913 2,889,572, ,623,782, Connecticut 1,941,183, ,546, ,811,637, Delaware 527,527, ,527, District of Columbia 238,285,961 NA NA NA NA Florida 284,411, ,411, Georgia 1,219,259, ,219,259, Hawaii 56,111, ,111, Idaho 238,634, ,634, Illinois 4,970,062,569 2,625,456, ,344,606, Indiana 2,055,626,446 1,209,098, ,528, Iowa 3,227,639, ,089, ,089,549, Kansas 3,475,596, ,101, ,273,494, Kentucky 143,333, ,333, Louisiana NA NA NA NA NA Maine 6,336,639,833 6,245,995, ,643, Maryland 2,909,187, ,909,187, Massachusetts 3,913,104, ,913,104, Michigan 3,310,037, ,086, ,130,951, Minnesota 979,324, ,324, Mississippi 148,894,506 14,373, ,520, Missouri 1,934,804, ,402, ,763,401, Montana 100,229, ,229, Nebraska 2,840,151, ,073, ,869,077, Nevada 10,123,889, ,984, ,831,904, New Hampshire 11,325,902,876 3,579,861, ,746,041, New Jersey 2,954,425,149 2,259,212, ,213, New Mexico 2,033,384,108 1,658,074, ,309, New York 14,230,339,232 2,286,956, ,943,382, North Carolina 1,043,808, ,043,808, North Dakota 329,194, ,194, Ohio 6,694,176,308 3,859,053, ,835,122, Oklahoma 568,573,296 60,932, ,640, Oregon 1,663,333, ,544, ,788, Pennsylvania 1,199,437, ,199,437, Rhode Island 7,316,411,775 7,146,331, ,080, Exhibit 3 continues on the following page.

6 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 6 of 59 Exhibit 3 continued 529 Plan Assets by State, Distribution Channel Arizona and Tennessee data as of 01/31/2013. Other data as of 12/31/2012. Source: Morningstar, Inc. State Total State Assets USD Advisor-Sold Assets USD Advisor-Sold Assets Direct-Sold Assets USD Direct-Sold Assets South Carolina 1,585,590,648 1,088,713, ,877, South Dakota 1,046,103,137 1,021,960, ,142, Tennessee 2,428, ,428, Texas 377,902, ,174, ,728, Utah 5,161,019, ,161,019, Vermont 185,339, ,339, Virginia 37,562,869,912 35,455,882, ,106,987, West Virginia 1,733,662,835 1,306,413, ,249, Wisconsin 2,936,791,917 1,352,076, ,584,715,

7 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 7 of 59 Process Many 529 plan participants invest in age-based options on behalf of their beneficiaries. These options asset allocations shift over time, beginning as predominantly equity-heavy investments when beneficiaries are more than a decade from college enrollment and becoming primarily invested in bonds and cash by the enrollment date. Morningstar collects each age-based track s intended asset allocation over time, which is known in the industry as the track s glide path. The industry s average glide path has moved around slightly since September 2010, when Morningstar began publishing glide-path data for 529 plans. This movement in the average is likely driven by changes in 529 plans program managers, which offer age-based tracks that may differ (usually marginally) in their asset allocation relative to the previous program manager s glide path(s). That said, the industry averages on September 2010 and January 2013 are nearly identical, though the most recent data show there s slightly less exposure to equities between ages 11 and 18 (about 1 percentage point per year, on average) than there was in In both 2010 and 2013, the average glide path holds steady at 80 equity until the beneficiary is 4 years old, and from there, the portion of the portfolio dedicated to stocks declines until it reaches 10 of assets when the beneficiary is 19 years old. As part of its qualitative 529 plan ratings process, Morningstar studies the process that plans go through to establish an age-based option s glide path and to choose the underlying investments that make up each age-based option. The goal of this research is not to determine an ideal asset allocation; we maintain that the 529 plan investor is best suited to determine whether the plan s asset allocation is appropriate based on the investor s appetite for risk, additional sources of funding, Exhibit 4 Average 529 Plans Equity Allocation by Beneficiary Age Data as of 1/31/13 Source: Morningstar, Inc. Industry Average Equity Allocation: January 2013 August 2011 September 2010 Age 0 1/ / / Age 5 1/ / / Age 10 1/ / / Age 15 1/ / / Age 19 1/ / /

8 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 8 of 59 and other individual circumstances. As such, Morningstar s research evaluates the relative rigor and resources behind the asset-allocation process. The teams that are best-equipped to make strong asset-allocation decisions are those backed by experienced researchers who base their decisions on global market trends, investor behavior, and the strength of the underlying investment strategies at their disposal. Morningstar has observed that some 529 plans shortcomings in asset allocation can be overcome by strong underlying investments, while in other cases, strong asset allocation can make up for less impressive performance from underlying investments. For example, T. Rowe Price s 529 plans in Maryland and Alaska, which top the industry with the highest average Morningstar Rating for their underlying investments, have been successful even though the age-based tracks equityheavy glide path hasn t always been in favor. Meanwhile, many plans with indexed underlying investments have performed well even though the options passive components cannot meaningfully outperform the market. The industry s strongest 529 plans are adept at both asset allocation and underlying investment selection, and these plans receive positive ratings for Process, one of five components of the Morningstar Analyst Rating for 529 plans. Open-Architecture Plans Fall Short When determining which investments to feature within the 529 plan, some management teams choose strategies (often mutual funds or exchange-traded funds) from a single asset-management firm, while others include a broader set. Plans with investment options from a single provider are known as having closed architecture, while those with investments from multiple asset managers are known as having open architecture. Logic suggests that open-architecture plans operate at an advantage because they can include the best strategies from a number of providers, while the closed-architecture plans have a limited decision set. But numerous Morningstar studies of 529 college-savings plans show that open-architecture plans have not executed as well as closed-architecture plans. Closed-architecture plans, both directand advisor-sold, have performed better on a risk-adjusted basis over the long term while charging college savers less. The closed-architecture plans had higher overall Morningstar Ratings, on average. Exhibit Plans Performance by Sales Channel and Plan Architecture Morningstar Rating data as of 1/31/13. Net assets data as of 2/28/13. Source: Morningstar, Inc. Sales Channel Plan Architecture Avg Overall Morningstar Star Rating Assets With Morningstar Rating Annualized Return 3-Year Annualized Return 5-Year Assets With 3-Year History Assets With 5-Year History Average Expense Ratio Total 529 Investment Options Advisor-Sold Closed ,147 Open ,110 Direct-Sold Closed Open

9 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 9 of 59 To be sure, open-architecture advisor-sold plans had higher three- and five-year returns and open-architecture direct-sold plans had slightly higher three-year returns. However, after adjusting for risk, which is reflected in the Morningstar Rating, the open-architecture plans fall behind. Also, many of the advisor-sold investment options aren t old enough to be included in the calculation. Just 73 of the open-architecture advisor-sold assets have a three-year performance history, and 57 have a five-year history, while the inclusion rate is significantly higher for advisor-sold closed-architecture assets and both open- and closed-architecture direct-sold plans. Performance itself may explain why advisor-sold open-architecture plans have a higher percentage of assets in options with fewer than three years of performance. These newer options likely replaced older options that were underperforming and were removed from the plan. Theoretically these newer options have better prospects than the ones they replaced, so the advisor-sold open-architecture plans may continue to outperform going forward, but that has not been the case for direct-sold plans with open architecture. The differences between these groups performances are relatively subtle, which makes it reasonable to conclude that open-architecture plans haven t demonstrated that their all-star approach is decidedly superior to those series that are only using managers from the home team.

10 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 10 of 59 Performance Even though 529 plans investment options have improved considerably in the past several years, 529 options average performance has lagged that of mutual funds. Over the five-year period through Jan. 31, 2013, all but one Morningstar category of 529 investment options underperformed the analogous open-end fund category on an annualized basis. Returns were most similar for equity-heavy investments, such as 529 options and mutual funds in the large-blend, large-growth, large-value, and aggressive-allocation categories. Bond-heavy categories like moderate-allocation, conservative-allocation, and especially intermediate-term bond had a wider difference, with 529s trailing open-end funds. Short-term bonds bucked the trend: Shortterm bond 529 investments outperformed open-end short-term bond funds by 10 basis points on average. These numbers may suggest that 529 program managers have selected poor underlying funds, but it s more likely that expenses are to blame. Historically 529 investments have cost more than mutual funds, and those higher expenses have dragged on long-term returns. (For more on expenses of 529 plans and other investments, see the Price section of this paper.) In addition to meaningful differences in expenses, Morningstar s 529 categories have significant differences from their corresponding mutual fund categories that could impact performance. For instance, 529 equity categories tend to have a much higher weighting to index funds. In Morningstar s static large-blend category for 529 investment options, 28 of the options are Exhibit Investment Option and Open-End Mutual Fund 5-Year Category Returns Data as of 1/31/13. Source: Morningstar, Inc. 529 Investment Open-End Mutual Fund Short-Term Bond Aggressive Allocation Large Blend Large Value Large Growth Moderate Allocation Conservative Allocation Intermediate- Term Bond

11 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 11 of 59 indexed, while 15 of traditional mutual funds in Morningstar s large-blend category are indexed. In markets where active management shines, investors can reasonably expect index-heavy 529 investments to lag. In markets where active management suffers, 529 investments may do better on average (assuming they can overcome the higher fee hurdle). For example, many active large-blend managers have had trouble beating the S&P 500 Index since 2010, which allowed indexed options returns to exceed the 529 large-blend category average. But the opposite was true in 2007, when active managers outperformed. Also, 529 bond categories frequently take less equity risk and credit risk than their open-end counterparts. Fear of losses, particularly in the wake of 2008, has led plan managers to select options with higher credit quality or more cash. To wit, the intermediate-term bond category for 529 investment options has an average credit quality of A and 17 of assets in cash, while the same category for traditional mutual funds has an average credit quality of BBB and just 4 of assets in cash. In markets where lower-quality bonds rally, 529 bond investments are understandably left behind. 529s Lag Blended Benchmarks Fortunately for college savers, all 529 age-based investment options have posted gains for the three-, five-, and 10-year periods. Not surprisingly, equity-heavy investments have posted the strongest gains for the decade through Feb. 28, 2013, with the S&P 500 gaining 8.24 per year on average. Bond- and cash-heavy categories have posted slim annualized returns, with the Barclays Aggregate Bond gaining 5.01 per year on average over the period. Exhibit 7 Returns of Age-Based Options Data as of 2/28/13. Source: Morningstar, Inc. Name 3-Year Annualized Total Return Month-End USD Blended Benchmark 5-Year Annualized Total Return Month-End USD Blended Benchmark 10-Year Annualized Total Return Month-End USD Blended Benchmark Asset Allocation US 529 Age 0-6 High Equity US 529 Age 0-6 Medium Equity US 529 Age 0-6 Low Equity US 529 Age 7-12 High Equity US 529 Age 7-12 Medium Equity US 529 Age 7-12 Low Equity US 529 Age High Equity US 529 Age Medium Equity US 529 Age Low Equity US 529 Age 19+ High Equity US 529 Age 19+ Medium Equity US 529 Age 19+ Low Equity Barclays US Agg Bond TR USD 5.45 NA 5.52 NA 5.01 NA S&P 500 TR NA 4.94 NA 8.24 NA USTREAS T-Bill Auction Ave 3 Mon 0.10 NA 0.30 NA 1.73 NA Bond (Net) Equity (Net) Cash (Net)

12 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 12 of 59 The 529 age-based category returns don t look as compelling, however, when compared against a combination of benchmarks that mimic the options average asset allocation to equities, bonds, and cash. The blended benchmark weights the returns of the S&P 500 Index, the Barclays Aggregate Bond Index, and the 3-Month U.S. Treasury Bill according to each category s average allocation to stocks, bonds, and cash to determine benchmark performance. Not until the 10-year period, and then in only stock-heavy categories, do the 529 options outperform the blended benchmark. Expenses are to blame for much of these shortfalls, but notable differences in the options actual asset allocation relative to the blended benchmark could also bring underperformance. 529 age-based options often include exposure to smaller companies stocks, non-u.s. equities, and a broad array of bonds that are not included in the blended benchmark. Exposure to these asset classes and subasset classes affects performance. Higher allocations to international stock, for instance, would have hurt 529 categories returns relative to the blended benchmark for the three- and five-year periods. It s also worth noting that 529 investors don t pay taxes on their investments gains, so their proceeds are higher than an open-end indexed mutual fund or similar ETF on an aftertax basis. To best compare long-term returns, it is important for college savers to review performance and volatility. The Morningstar Rating for funds compares risk-adjusted returns of investments in the same category and provides college savers an easy gauge to see whether their 529 investments brought more return with less volatility. Both mutual funds and 529 investments earn 3 stars if their risk-adjusted performance is near the middle of their peer groups; 4- and 5-star investments outperformed their peer groups; and 1- and 2-star investments underperformed their peer groups. The Morningstar Rating uses a bell-curve distribution, so the largest subset of funds receives 3 stars. Exhibit 8 aggregates the Morningstar Rating by plan on an asset-weighted basis. This calculation puts more emphasis on options within a given 529 plan that hold more assets, so as to better represent the investor experience. None of the plans had an asset-weighted Morningstar Rating of 4 or greater, but slightly more than one third of the plans with adequate performance histories had asset-weighted Morningstar Ratings of 3 or greater. This indicates that these plans assets posted largely competitive returns. Morningstar could not calculate asset-weighted Morningstar Ratings for 18 plans because none of their investments had at least three years of performance history. Passively managed plans with low fees are well-represented at the top of the list. New York s 529 Program (Direct), CollegeInvest Direct Portfolio, and The Vanguard 529 College Savings Plan are all primarily indexed plans and earn high marks for their reasonable expenses. Plans with actively

13 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 13 of 59 managed options or options with a blend of active and passive management, such as the Maryland College Investment Plan, the T. Rowe Price College Savings Plan, and the CollegeAdvantage 529 Savings Plan also had strong risk-adjusted returns. Broadly speaking, the plans with the best asset-weighted Morningstar Ratings (those with averages exceeding 3.5, for example) tended to be competitively priced within their peer groups. Although blended and actively managed plans, such as the T. Rowe Price College Savings Plan, are more expensive than pure index offerings like The Vanguard 529 College Savings Plan, they are still relatively inexpensive compared with similarly run offerings. (These peer-group expenses are discussed further in the Price section of this paper.) While high Morningstar Ratings are a good signal of past performance, college savers should remember that they come with limits. Morningstar Ratings compare investments within their Morningstar category peer groups. Morningstar s 529 categories often include a wider range of investment styles than the comparable open-end mutual fund category. For instance, there is no 529 category for emerging-markets investments as there are in the open-end mutual fund universe. Such 529 investment options are included in the all-encompassing non-u.s. equity category and contribute a wider range of returns than one would see across the numerous non-u.s. equity categories for open-end mutual funds. Additionally, almost every equity-heavy 529 peer group has a large allocation to index funds. If the indexed investments all deliver similar returns, active management likely will be heavily penalized or heavily rewarded for deviating from the group average. For instance, among static large-blend 529 investments, the category average return for calendar-year 2012 was Options that underperformed by 1 percentage point landed in the 75th percentile of the peer group for the time period, while options that returned 1 percentage point more than the average return landed in the 27th percentile of the category for Large-blend mutual funds had a much wider dispersion of returns. The large-blend category average return for 2012 was A fund that underperformed the category by 100 basis points landed in the group s 68th percentile, while one that outperformed the category average by the same amount landed in the 36th percentile. The smaller dispersion of returns for 529 large-blend options means that deviations in performance have a larger impact on relative rank. Finally, it is worth noting that plans with poor average asset-weighted Morningstar Ratings may not be at the bottom of the list for long. Several plans have a small percentage of assets in funds that earn a Morningstar Rating, such as the Michigan Education Savings Program, which has only 23 of assets with a Morningstar Rating. These plans averages may change significantly as more funds earn Morningstar ratings. Meanwhile, other poorly performing plans where most assets receive a Morningstar Rating, like the Texas Lonestar 529 Plan, are less likely to change simply because their investment options gain a longer history. There are few long-tenured poorly performing plans because plans with poor historical performance usually are either completely rebuilt or

14 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 14 of 59 heavily reconstructed. In Wisconsin, for example, Tomorrow s Scholar 529 Plan and EdVest 529 Plan implemented significant changes in 2012 after the plans turned in mediocre performances in years prior.

15 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 15 of 59 Exhibit 8 Asset-Weighted Average Morningstar Rating by 529 Plan Data as of 1/31/13. Source: Morningstar, Inc. State Plan Name Asset-Weighted Average Morningstar Rating by Plan Plan Assets With Rating MD Maryland College Investment Plan AK T. Rowe Price College Savings Plan NY New York's 529 Program (Direct) CO CollegeInvest Direct Portfolio OH CollegeAdvantage 529 Savings Plan NV The Vanguard 529 College Savings Plan PA Pennsylvania 529 Investment Plan FL Florida College Investment Plan KS Schwab 529 College Savings Plan NV USAA College Savings Plan VA Virginia529 invest VT Vermont Higher Education Investment Plan KS LearningQuest 529 Program (Direct) AR GIFT College Investing Plan HI HI529 - Hawaii's College Savings Program VA CollegeAmerica ID IDeal - Idaho College Savings Program SC Future Scholar 529 (Direct) UT Utah Educational Savings Plan IA College Savings Iowa 529 Plan KY Kentucky Education Savings Plan Trust IL Bright Start College Savings (Direct) IN CollegeChoice 529 Direct Savings Plan WV SMART529 Select College Savings Plan OR MFS 529 Savings Plan ND College SAVE NJ NJBEST 529 College Savings Plan MI MI 529 Advisor AK John Hancock Freedom AR ishares 529 Plan MN Minnesota College Savings Plan DE Delaware College Investment Plan OK Oklahoma College Savings Plan NH UNIQUE College Investing Plan MA U.Fund College Investing Plan IL Bright Directions Coll Savings Program AZ Ivy Funds InvestEd 529 Plan WV SMART529 WV Direct College Savings Plan IA Iowa Advisor 529 Plan MO MOST Missouri's 529 Plan Exhibit 8 continues on the following page.

16 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 16 of 59 Exhibit 8 continued Asset-Weighted Average Morningstar Rating by 529 Plan Data as of 1/31/13. Source: Morningstar, Inc. State Plan Name Asset-Weighted Average Morningstar Rating by Plan Plan Assets With Rating MS Mississippi Affordable (Advisor) AZ Fidelity Arizona College Savings Plan ME NextGen College Investing Plan Select CT Connecticut Higher Education Trust SD CollegeAccess TX Texas College Savings Plan OK OklahomaDream ME NextGen College Investing Plan Direct SC Future Scholar 529 (Advisor) WV The Hartford SMART CO Scholars Choice College Savings Program MO MOST 529 Advisor Plan IN CollegeChoice Advisor 529 Savings Plan NJ Franklin Templeton 529 Coll Savings Plan NH Fidelity Advisor 529 Plan DC DC College Savings Program IL Bright Start Coll Savings (Advisor) KS LearningQuest 529 Program (Advisor) NM The Education Plan NE State Farm College Savings Plan RI CollegeBoundfund NM Scholar'sEdge TX Lonestar 529 Plan MI Michigan Education Savings Program GA Path2College 529 Plan OH BlackRock CollegeAdvantage 529 Plan MS Mississippi Affordable (Direct) CT CHET Advisor College Savings Plan NA 0.00 RI CollegeBoundfund Direct NA 0.00 AL CollegeCounts 529 Fund NA 0.00 AL CollegeCounts 529 Fund Advisor Plan NA 0.00 WI EdVest 529 Plan NA 0.00 MT MFESP Investment Plan NA 0.00 NC National College Savings Program NA 0.00 NE NEST Advisor College Savings Plan NA 0.00 NE NEST Direct College Savings Plan NA 0.00 NY New York's 529 Program (Advisor-Guided) NA 0.00 OR Oregon College Savings Plan NA 0.00 NV Putnam 529 for America NA 0.00 CA ScholarShare College Savings Plan NA 0.00 Exhibit 8 continues on the following page.

17 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 17 of 59 Exhibit 8 continued Asset-Weighted Average Morningstar Rating by 529 Plan Data as of 1/31/13. Source: Morningstar, Inc. State Plan Name Asset-Weighted Average Morningstar Rating by Plan Plan Assets With Rating NV SSgA Upromise 529 Plan NA 0.00 NE TD Ameritrade 529 College Savings Plan NA 0.00 TN TNStars College Saving 529 Program NA 0.00 WI Tomorrow's Scholar 529 Plan NA 0.00 AK University of Alaska Coll Savings Plan NA NA

18 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 18 of 59 Price Morningstar has tracked the movements in 529 investments fees since The 2010 industry survey shone a light on the significantly higher expense ratios paid by college savers in comparison to typical mutual fund investors. The 2010 survey found that 529 categories charged up to 40 basis points more on average than the analogous open-end fund peer group. That difference shrank to 31 basis points in investments fees have continued to fall since then: All of the 529 categories shown in Exhibit 9 had lower average expense ratios in 2013 than in (Note that the aggressive-allocation open-end fund category didn t exist in 2011.) These fee reductions slightly narrowed the expense gap between 529 investments and their respective open-end equivalents. The average large-blend 529 investment option continues to undercut the average open-end largeblend fund on price. As of January 2013, the typical large-blend 529 investment charged 1.05, down from 1.13 in 2011, as more plans added indexed options to their 529 plans. Over the same period the average open-end investment expense ratio has risen to 1.27 in 2013 from 1.14 in Exhibit Investment Options and Mutual Fund Average Total Expense Ratios, 2013 and 2011 Data as of 1/31/13. Source: Morningstar, Inc. 529 Investment Open-End Mutual Fund 01/31/ /31/2011 Large Value Large Blend Large Growth Moderate Allocation Conservative Allocation Aggressive Allocation 1.29 NA 0.94 NA Intermediate-Term Bond Short-Term Bond

19 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 19 of 59 Index funds don t entirely explain the price reductions in the 529 industry, however. Several states aggressively negotiated for lower-cost investments in 2012 as their 529 program management contracts were up for renewal. South Carolina s direct-sold Future Scholar 529 program is a notable example. The Columbia-run plan dropped its prices to become one of the cheapest on the market; its average total expense ratio dropped to 0.13 in 2013 from 0.49 in The underlying investments were formerly a mix of active and passive management and are now entirely passively managed. Additionally, the direct-sold plan has no program management fees. Now the plan is even cheaper than New York s 529 Program and the Utah Educational Savings Plan, which are much larger plans by assets under management and historically had been the lowest-priced index options available to college savers. In fact, several of the cheapest plans on the market in January 2013, such as Michigan Education Savings Program and EdVest 529 Plan, are plans that were formerly priced near or above industry peers and recently negotiated more-competitive fees for college savers by substituting index options and dropping program management fees. Exhibit 11 shows each plan s average and asset-weighted total expense ratio. As has historically been the case, direct-sold plans dominated by index funds tend to be the cheapest in the industry, and advisor-sold plans tend to be the most expensive when measuring on an absolute basis. However, it is useful to compare fees in the context of a more refined peer group. The Morningstar Fee Level Distribution methodology groups funds by strategic objective and distribution channel. In the context of selecting a 529 plan, the Morningstar Fee Level Distribution compares investment options by distribution channel and investment type and helps investors pick the cheapest option within the direct-sold universe, or the most cost-competitive advisor-sold plan. With this data, investors can distinguish competitively priced advisor-sold plans such as the Arkansas ishares 529 plan and the Virginia CollegeAmerica plan, as well as unusually expensive direct-sold plans like North Dakota s College SAVE plan. Exhibit 12 shows each plan s average and asset-weighted Fee Level Distribution rank. While the Morningstar Fee Level Distribution is a useful tool for comparing funds with similar strategies and share classes, it doesn t hint at whether the underlying investments are actively or passively managed. An increasing portion of the 529 market is entirely passively managed, while active management retains a foothold in some areas (especially advisor-sold plans). Other plans have options that include a mix of active and passive management. Program managers often design these blended options in the hope that the active managers provide peer-beating returns while the passive portions keep volatility in line with the market and limit manager-specific risk. The cost of running this range of strategies active, passive, and blended varies and makes it difficult to compare prices. To better compare 529 expenses, Morningstar divided 529 age-based options into groups based on their distribution channel and underlying investment types. After dividing the age-based options by whether they are direct- or advisor-sold, Morningstar categorizes the options into one of three

20 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 20 of 59 groups: actively managed, passively managed, or a blend of the two. (The blend groups are defined as having between 20 and 80 in active management.) The average total expense ratio for each age-based track is then determined. (Note that only A and C shares are included in the tables for advisor-sold funds. This means that some resident-only advisor-sold shares are also excluded.) Exhibits 13 and 14 show the average expense ratio for each age-based track in the 529 universe. Note that the Track Name column, which shows the agebased track s name according to disclosure documents and marketing materials, may not always include the phrase age-based. While overall expense ratios tend to be higher for advisor-sold age-based options, the biggest amount of variation in expenses comes from direct-sold passive options. The cheapest direct-sold passive option charged 0.11 on average, while the most expensive charged a whopping The underlying fund expenses for index-based options tend to be low, the difference in price across plans frequently comes from program management fees. Program management fees typically cover administrative and marketing costs, and larger plans can benefit from economies of scale to negotiate lower program management fees. For instance, New York s 529 Program (Direct) has more than $12 billion in assets under management and charges between 0.09 and 0.14 for program management fees, while North Dakota s $335 million College SAVE plan charges a 0.68 program management fee. Regardless of cause, higher expenses guarantee that indexed strategies will underperform their benchmarks, so it pays for investors to be especially price-sensitive for passively managed investments. Exhibit Age-Based Track Total Expense Ratio Ranges Data as of 2/28/13. Source: Morningstar, Inc. Min. Max. Avg. Direct-Sold Actively Managed Age-Based Tracks Passively Managed Age-Based Tracks Blended Age-Based Tracks Average Expense Ratio Ranges Advisor-Sold Actively Managed Age-Based Tracks A Shares C Shares Passively Managed Age-Based Tracks No Load 0.61 A Shares C Shares Blended Age-Based Tracks A Shares C Shares

21 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 21 of 59 Blended options also vary dramatically in price, though this is less surprising given the range of active management in these investments. For instance, the T. Rowe Price College Savings Plan s age-based option is the most expensive of the direct-sold blend group, but it has one of the lowest allocations to index funds. Meanwhile, the age-based options at EdVest 529 Plan and Path2College 529 Plan cost less because they benefit from a hefty weighting to index funds. The presence of multiple asset managers can also affect total expense ratios. Among direct-sold actively managed plans, those with open architecture have higher prices. The trend doesn t seem to occur among advisor-sold actively managed funds; both closed- and open-architecture plans occupy the top and bottom of the price spectrum. Only college savers can decide their preferences for advisor-sold or direct-sold plans and whether to choose active management or passive management or a blend of both. Once these decisions are made, however, it pays to be price-conscious; Morningstar s research has demonstrated that more-expensive investments are less likely to outperform over the long term. If a more expensive plan comes along with generous state tax benefits, it may be a sensible option for some college savers. Otherwise, it may make sense to find the most cost-competitive plan available.

22 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 22 of 59 Exhibit 11 Average and Asset-Weighted Total Expense Ratios by 529 Plan Data as of 2/28/13. Source: Morningstar, Inc. State 529 Plan Name Sales Channel Average Total Expense Ratio Asset-Weighted Total Expense Ratio SC Future Scholar 529 (Direct) Direct NY New York's 529 Program (Direct) Direct UT Utah Educational Savings Plan Direct MI Michigan Education Savings Program Direct WI EdVest 529 Plan Direct IA College Savings Iowa 529 Plan Direct NV The Vanguard 529 College Savings Plan Direct WV SMART529 WV Direct College Savings Plan Direct GA Path2College 529 Plan Direct OH CollegeAdvantage 529 Savings Plan Direct MO MOST Missouri's 529 Plan Direct CA ScholarShare College Savings Plan Direct NC National College Savings Program Direct AL CollegeCounts 529 Fund Direct CT Connecticut Higher Education Trust Direct IL Bright Start College Savings (Direct) Direct TN TNStars College Saving 529 Program Direct MN Minnesota College Savings Plan Direct RI CollegeBoundfund Direct Direct OR Oregon College Savings Plan Direct VA Virginia529 invest Direct CO CollegeInvest Direct Portfolio Direct NE NEST Direct College Savings Plan Direct PA Pennsylvania 529 Investment Plan Direct VT Vermont Higher Education Investment Plan Direct NM The Education Plan Direct IN CollegeChoice 529 Direct Savings Plan Direct ME NextGen College Investing Plan Direct Direct OK Oklahoma College Savings Plan Direct NV SSgA Upromise 529 Plan Direct KS LearningQuest 529 Program (Direct) Direct KY Kentucky Education Savings Plan Trust Direct AR ishares 529 Plan Advisor NE TD Ameritrade 529 College Savings Plan Direct TX Texas College Savings Plan Direct MS Mississippi Affordable (Direct) Direct NH UNIQUE College Investing Plan Direct DE Delaware College Investment Plan Direct MA U.Fund College Investing Plan Direct AZ Fidelity Arizona College Savings Plan Direct Exhibit 11 continues on the following page.

23 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 23 of 59 Exhibit 11 continued Average and Asset-Weighted Total Expense Ratios by 529 Plan Data as of 2/28/13. Source: Morningstar, Inc. State 529 Plan Name Sales Channel Average Total Expense Ratio Asset-Weighted Total Expense Ratio WV SMART529 Select College Savings Plan Direct MS Mississippi Affordable (Advisor) Advisor AK T. Rowe Price College Savings Plan Direct ID IDeal - Idaho College Savings Program Direct AR GIFT College Investing Plan Direct HI HI529 - Hawaii's College Savings Program Direct MD Maryland College Investment Plan Direct FL Florida College Investment Plan Direct AK University of Alaska Coll Savings Plan Direct 0.76 NA NJ NJBEST 529 College Savings Plan Direct IL Bright Start Coll Savings (Advisor) Advisor ND College SAVE Direct MT MFESP Investment Plan Direct NV USAA College Savings Plan Direct KS Schwab 529 College Savings Plan Direct VA CollegeAmerica Advisor NE NEST Advisor College Savings Plan Advisor IL Bright Directions Coll Savings Program Advisor RI CollegeBoundfund Advisor AZ Ivy Funds InvestEd 529 Plan Advisor CO Scholars Choice College Savings Program Advisor DC DC College Savings Program Advisor and Direct AL CollegeCounts 529 Fund Advisor Plan Advisor OH BlackRock CollegeAdvantage 529 Plan Advisor WI Tomorrow's Scholar 529 Plan Advisor NE State Farm College Savings Plan Advisor NY New York's 529 Program (Advisor-Guided) Advisor IN CollegeChoice Advisor 529 Savings Plan Advisor OK OklahomaDream529 Advisor CT CHET Advisor College Savings Plan Advisor WV The Hartford SMART529 Advisor ME NextGen College Investing Plan Select Advisor MO MOST 529 Advisor Plan Advisor SC Future Scholar 529 (Advisor) Advisor MI MI 529 Advisor Advisor NM Scholar'sEdge Advisor SD CollegeAccess 529 Advisor and Direct NV Putnam 529 for America Advisor TX Lonestar 529 Plan Advisor NH Fidelity Advisor 529 Plan Advisor Exhibit 11 continues on the following page.

24 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 24 of 59 Exhibit 11 continued Average and Asset-Weighted Total Expense Ratios by 529 Plan Data as of 2/28/13. Source: Morningstar, Inc. State 529 Plan Name Sales Channel Average Total Expense Ratio Asset-Weighted Total Expense Ratio KS LearningQuest 529 Program (Advisor) Advisor IA Iowa Advisor 529 Plan Advisor NJ Franklin Templeton 529 Coll Savings Plan Advisor OR MFS 529 Savings Plan Advisor AK John Hancock Freedom 529 Advisor

25 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 25 of 59 Exhibit 12 Average Morningstar Fee Level Distribution Percentile Rank by 529 Plan Data as of 2/28/13. Source: Morningstar, Inc. State 529 Plan Name Sales Channel Average Morningstar Fee Level Distribution Percentile Rank Asset-Weighted Morningstar Fee Level Distribution Percentile Rank NY New York's 529 Program (Direct) Direct SC Future Scholar 529 (Direct) Direct MS Mississippi Affordable (Advisor) Advisor VA CollegeAmerica Advisor AR ishares 529 Plan Advisor WI EdVest 529 Plan Direct MI Michigan Education Savings Program Direct UT Utah Educational Savings Plan Direct IL Bright Start Coll Savings (Advisor) Advisor NE NEST Advisor College Savings Plan Advisor IA College Savings Iowa 529 Plan Direct NV The Vanguard 529 College Savings Plan Direct OH CollegeAdvantage 529 Savings Plan Direct RI CollegeBoundfund Direct Direct WV SMART529 WV Direct College Savings Plan Direct CA ScholarShare College Savings Plan Direct RI CollegeBoundfund Advisor MO MOST Missouri's 529 Plan Direct GA Path2College 529 Plan Direct AL CollegeCounts 529 Fund Direct IL Bright Start College Savings (Direct) Direct IN CollegeChoice Advisor 529 Savings Plan Advisor WI Tomorrow's Scholar 529 Plan Advisor CO Scholars Choice College Savings Program Advisor NC National College Savings Program Direct TN TNStars College Saving 529 Program Direct VA Virginia529 invest Direct MO MOST 529 Advisor Plan Advisor SC Future Scholar 529 (Advisor) Advisor IL Bright Directions Coll Savings Program Advisor CT Connecticut Higher Education Trust Direct MN Minnesota College Savings Plan Direct OR Oregon College Savings Plan Direct NH Fidelity Advisor 529 Plan Advisor WV The Hartford SMART529 Advisor CO CollegeInvest Direct Portfolio Direct NM The Education Plan Direct NE NEST Direct College Savings Plan Direct VT Vermont Higher Education Investment Plan Direct NE State Farm College Savings Plan Advisor Exhibit 12 continues on the following page.

26 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 26 of 59 Exhibit 12 continued Average Morningstar Fee Level Distribution Percentile Rank by 529 Plan Data as of 2/28/13. Source: Morningstar, Inc. State 529 Plan Name Sales Channel Average Morningstar Fee Level Distribution Percentile Rank Asset-Weighted Morningstar Fee Level Distribution Percentile Rank NV Putnam 529 for America Advisor NM Scholar'sEdge Advisor AZ Ivy Funds InvestEd 529 Plan Advisor PA Pennsylvania 529 Investment Plan Direct OK OklahomaDream529 Advisor ME NextGen College Investing Plan Select Advisor KS LearningQuest 529 Program (Direct) Direct IN CollegeChoice 529 Direct Savings Plan Direct AL CollegeCounts 529 Fund Advisor Plan Advisor ME NextGen College Investing Plan Direct Direct KY Kentucky Education Savings Plan Trust Direct DE Delaware College Investment Plan Direct OK Oklahoma College Savings Plan Direct AZ Fidelity Arizona College Savings Plan Direct NE TD Ameritrade 529 College Savings Plan Direct NV SSgA Upromise 529 Plan Direct MA U.Fund College Investing Plan Direct SD CollegeAccess 529 Advisor and Direct OH BlackRock CollegeAdvantage 529 Plan Advisor CT CHET Advisor College Savings Plan Advisor NH UNIQUE College Investing Plan Direct MS Mississippi Affordable (Direct) Direct TX Lonestar 529 Plan Advisor NY New York's 529 Program (Advisor-Guided) Advisor TX Texas College Savings Plan Direct IA Iowa Advisor 529 Plan Advisor MI MI 529 Advisor Advisor WV SMART529 Select College Savings Plan Direct OR MFS 529 Savings Plan Advisor AK T. Rowe Price College Savings Plan Direct AK University of Alaska Coll Savings Plan Direct NA MD Maryland College Investment Plan Direct AR GIFT College Investing Plan Direct ID IDeal - Idaho College Savings Program Direct NJ Franklin Templeton 529 Coll Savings Plan Advisor HI HI529 - Hawaii's College Savings Program Direct AK John Hancock Freedom 529 Advisor NJ NJBEST 529 College Savings Plan Direct FL Florida College Investment Plan Direct MT MFESP Investment Plan Direct Exhibit 12 continues on the following page.

27 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 27 of 59 Exhibit 12 continued Average Morningstar Fee Level Distribution Percentile Rank by 529 Plan Data as of 2/28/13. Source: Morningstar, Inc. State 529 Plan Name Sales Channel Average Morningstar Fee Level Distribution Percentile Rank Asset-Weighted Morningstar Fee Level Distribution Percentile Rank KS LearningQuest 529 Program (Advisor) Advisor ND College SAVE Direct KS Schwab 529 College Savings Plan Direct DC DC College Savings Program Advisor and Direct NV USAA College Savings Plan Direct

28 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 28 of 59 Exhibit 13 Average Total Expense Ratios, Direct-Sold 529 Options Data as of 2/28/13. Source: Morningstar, Inc. State 529 Plan Name Track Name Average Total Expense Ratio Direct-Sold Actively Managed Age-Based Tracks RI CollegeBoundfund Direct Age-Based Moderate 0.20 RI CollegeBoundfund Direct Age-Based Aggressive 0.20 CA ScholarShare College Savings Plan Active Age-Based 0.53 SD CollegeAccess 529 Age-Based 0.54 KY Kentucky Education Savings Plan Trust Age-Based 0.65 NJ NJBEST 529 College Savings Plan Conservative 0.67 WV SMART529 Select College Savings Plan Age-Based 0.72 FL Florida College Investment Plan Age-Based 0.76 ME NextGen College Investing Plan Direct BR Age-Based 0.81 NJ NJBEST 529 College Savings Plan Moderate 0.84 NH UNIQUE College Investing Plan Age-Based Active 0.84 MA U.Fund College Investing Plan Age-Based Active 0.88 KS Schwab 529 College Savings Plan Moderately Cons 0.89 DE Delaware College Investment Plan Age-Based Active 0.89 AZ Fidelity Arizona College Savings Plan Age-Based Active 0.89 NJ NJBEST 529 College Savings Plan Growth 0.94 NV USAA College Savings Plan Age-Based 0.97 KS Schwab 529 College Savings Plan Moderate 0.98 KS Schwab 529 College Savings Plan Moderately Agg 1.03 KS Schwab 529 College Savings Plan Aggressive 1.15 NH UNIQUE College Investing Plan Age-Based Multi-Firm 1.18 DE Delaware College Investment Plan Age-Based Multi-Firm 1.21 AZ Fidelity Arizona College Savings Plan Age-Based Multi-Firm 1.21 MA U.Fund College Investing Plan Age-Based Multi-Firm 1.21 Minimum 0.20 Maximum 1.21 Average 0.84 Direct-Sold Passively Managed Age-Based Tracks SC Future Scholar 529 (Direct) Conservative Track 0.11 SC Future Scholar 529 (Direct) Moderate Track 0.12 SC Future Scholar 529 (Direct) Aggressive Track 0.14 NY New York's 529 Program (Direct) Moderate 0.17 NY New York's 529 Program (Direct) Conservative 0.17 NY New York's 529 Program (Direct) Aggressive 0.17 IL Bright Start College Savings (Direct) Age-Based Index 0.20 UT Utah Educational Savings Plan Age-Based Growth 0.23 UT Utah Educational Savings Plan Age-Based Aggressive Growth 0.24 CA ScholarShare College Savings Plan Passive Age-Based 0.24 UT Utah Educational Savings Plan Age-Based Conservative 0.24 Exhibit 13 continues on the following page.

29 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 29 of 59 Exhibit 13 continued Average Total Expense Ratios, Direct-Sold 529 Options Data as of 2/28/13. Source: Morningstar, Inc. State 529 Plan Name Track Name Average Total Expense Ratio OH CollegeAdvantage 529 Savings Plan Age-Based Aggressive 0.24 UT Utah Educational Savings Plan Age-Based Moderate 0.24 NV The Vanguard 529 College Savings Plan Conservative 0.25 NV The Vanguard 529 College Savings Plan Aggressive 0.25 NV The Vanguard 529 College Savings Plan Moderate 0.25 OH CollegeAdvantage 529 Savings Plan Age-Based Moderate 0.25 MI Michigan Education Savings Program Conservative Option 0.25 OH CollegeAdvantage 529 Savings Plan Age-Based Conservative 0.26 MI Michigan Education Savings Program Moderate Option 0.26 MI Michigan Education Savings Program Aggressive Option 0.27 IA College Savings Iowa 529 Plan Moderate Growth 0.28 IA College Savings Iowa 529 Plan Aggressive Growth 0.28 IA College Savings Iowa 529 Plan Growth 0.28 IA College Savings Iowa 529 Plan Conservative Growth 0.28 UT Utah Educational Savings Plan Customized Age-Based 0.30 DE Delaware College Investment Plan Age-Based Index 0.30 AZ Fidelity Arizona College Savings Plan Age-Based Index 0.31 MA U.Fund College Investing Plan Age-Based Index 0.31 MO MOST Missouri's 529 Plan Conservative 0.31 MO MOST Missouri's 529 Plan Moderate 0.32 MO MOST Missouri's 529 Plan Aggressive 0.32 AL CollegeCounts 529 Fund Aggressive 0.33 AL CollegeCounts 529 Fund Moderate 0.33 AL CollegeCounts 529 Fund Conservative 0.33 WV SMART529 WV Direct College Savings Plan Age-Based 0.33 NM The Education Plan Age-Based Index 0.35 NH UNIQUE College Investing Plan Age-Based Index 0.35 GA Path2College 529 Plan Aggressive Managed Option 0.37 NE NEST Direct College Savings Plan Index 0.37 NC National College Savings Program Aggressive 0.37 NC National College Savings Program Moderate 0.38 NC National College Savings Program Conservative 0.39 OR Oregon College Savings Plan Age-Based 0.40 ME NextGen College Investing Plan Direct ishares Age-Based 0.46 CO CollegeInvest Direct Portfolio Age-Based Moderate 0.48 CO CollegeInvest Direct Portfolio Age-Based Conservative 0.48 CO CollegeInvest Direct Portfolio Age-Based Aggressive 0.48 PA Pennsylvania 529 Investment Plan Aggressive 0.49 VT Vermont Higher Education Investment Plan Age-Based 0.50 NV SSgA Upromise 529 Plan College 0.50 Exhibit 13 continues on the following page.

30 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 30 of 59 Exhibit 13 continued Average Total Expense Ratios, Direct-Sold 529 Options Data as of 2/28/13. Source: Morningstar, Inc. State 529 Plan Name Track Name Average Total Expense Ratio PA Pennsylvania 529 Investment Plan Moderate 0.50 MN Minnesota College Savings Plan Age-Based 0.51 PA Pennsylvania 529 Investment Plan Conservative 0.51 TX Texas College Savings Plan Age-Based Index 0.54 OK Oklahoma College Savings Plan Aggressive 0.55 OK Oklahoma College Savings Plan Moderate 0.56 IN CollegeChoice 529 Direct Savings Plan Age-Based 0.56 OK Oklahoma College Savings Plan Conservative 0.56 NE TD Ameritrade 529 College Savings Plan Index 0.57 MS Mississippi Affordable (Direct) Age-Based 0.67 AR GIFT College Investing Plan Age-Based Aggressive 0.75 AR GIFT College Investing Plan Age-Based Conservative 0.75 AR GIFT College Investing Plan Age-Based Moderate 0.75 HI HI529 - Hawaii's College Savings Program Age-Based 0.75 ID IDeal - Idaho College Savings Program Aggressive 0.75 ID IDeal - Idaho College Savings Program Conservative 0.75 ID IDeal - Idaho College Savings Program Moderate 0.75 ND College SAVE Aggressive 0.85 ND College SAVE Conservative 0.85 ND College SAVE Moderate 0.85 Minimum 0.11 Maximum 0.85 Average 0.41 Direct-Sold Blended Age-Based Tracks WI EdVest 529 Plan Aggressive Age-Based Option 0.23 WI EdVest 529 Plan Age-Based Option 0.25 GA Path2College 529 Plan Managed Option 0.35 CT Connecticut Higher Education Trust Aggressive 0.39 CT Connecticut Higher Education Trust Moderate 0.40 CT Connecticut Higher Education Trust Conservative 0.41 NE NEST Direct College Savings Plan Conservative 0.45 OH CollegeAdvantage 529 Savings Plan Advantage Age-Based 0.46 NE NEST Direct College Savings Plan Growth 0.50 NE NEST Direct College Savings Plan Aggressive 0.51 VA Virginia529 invest Age-Based 0.56 KS LearningQuest 529 Program (Direct) Conservative 0.58 IL Bright Start College Savings (Direct) Age-Based Active 0.60 NE TD Ameritrade 529 College Savings Plan Aggressive 0.66 NE TD Ameritrade 529 College Savings Plan Conservative 0.66 NE TD Ameritrade 529 College Savings Plan Growth 0.67 NM The Education Plan Age-Based 0.70 Exhibit 13 continues on the following page.

31 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 31 of 59 Exhibit 13 continued Average Total Expense Ratios, Direct-Sold 529 Options Data as of 2/28/13. Source: Morningstar, Inc. State 529 Plan Name Track Name Average Total Expense Ratio KS LearningQuest 529 Program (Direct) Aggressive 0.71 TX Texas College Savings Plan Age-Based Active 0.73 MD Maryland College Investment Plan Enrollment Based 0.82 AK University of Alaska Coll Savings Plan Enrollment Based 0.83 AK T. Rowe Price College Savings Plan Enrollment Based 0.83 Minimum 0.11 Maximum 0.85 Average 0.41

32 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 32 of 59 Exhibit 14 Average Total Expense Ratios, Advisor-Sold 529 Options Data as of 2/28/13. Source: Morningstar, Inc. State Plan Name Track Name Average Total Expense Ratio No Load A Shares C Shares Advisor-Sold Actively Managed Age-Based Tracks IL Bright Start Coll Savings (Advisor) Age-Based CO Scholars Choice College Savings Program Age-Based ME NextGen College Investing Plan Select MFS Age-Based RI CollegeBoundfund Age-Based Conservative ME NextGen College Investing Plan Select FT Age-Based RI CollegeBoundfund Age-Based Moderate RI CollegeBoundfund Age-Based Moderate NV Putnam 529 for America Conservative ME NextGen College Investing Plan Select Alllianz Age-Based IL Bright Directions Coll Savings Program Balanced KS LearningQuest 529 Program (Advisor) Conservative WI Tomorrow's Scholar 529 Plan Age-Based Options RI CollegeBoundfund Age-Based Aggressive RI CollegeBoundfund Age-Based Aggressive IL Bright Directions Coll Savings Program Growth AZ Ivy Funds InvestEd 529 Plan Age-Based 1.08 NA ME NextGen College Investing Plan Select BR Age-Based NE State Farm College Savings Plan Age-Based 1.08 NA NV Putnam 529 for America Moderate NV Putnam 529 for America Aggressive IL Bright Directions Coll Savings Program Aggressive WV The Hartford SMART529 Age-Based NH Fidelity Advisor 529 Plan Age-Based NM Scholar'sEdge Age-Based NJ Franklin Templeton 529 Coll Savings Plan Conservative CT CHET Advisor College Savings Plan Age-Based OR MFS 529 Savings Plan Age-Based OH BlackRock CollegeAdvantage 529 Plan Conservative SD CollegeAccess 529 Age-Based KS LearningQuest 529 Program (Advisor) Aggressive OK OklahomaDream529 Age-Based NJ Franklin Templeton 529 Coll Savings Plan Moderate OH BlackRock CollegeAdvantage 529 Plan Moderate MI MI 529 Advisor Age-Based NJ Franklin Templeton 529 Coll Savings Plan Growth OH BlackRock CollegeAdvantage 529 Plan Aggressive AK John Hancock Freedom 529 Age-Based Minimum Maximum Average Exhibit 14 continues on the following page.

33 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 33 of 59 Exhibit 14 continued Average Total Expense Ratios, Advisor-Sold 529 Options Data as of 2/28/13. Source: Morningstar, Inc. State Plan Name Track Name Average Total Expense Ratio No Load A Shares C Shares Advisor-Sold Passively Managed Age-Based Tracks AR ishares 529 Plan Enrollment Based 0.61 NA NA NE NEST Advisor College Savings Plan Index IN CollegeChoice Advisor 529 Savings Plan Enrollment Based Minimum Maximum Average Advisor-Sold Blended Age-Based Tracks NE NEST Advisor College Savings Plan Growth NE NEST Advisor College Savings Plan Aggressive SC Future Scholar 529 (Advisor) Conservative Track NE NEST Advisor College Savings Plan Conservative AL CollegeCounts 529 Fund Advisor Plan Conservative SC Future Scholar 529 (Advisor) Moderate Track AL CollegeCounts 529 Fund Advisor Plan Moderate NY New York's 529 Program (Advisor-Guided) Age-Based NY New York's 529 Program (Advisor-Guided) Age-Based AL CollegeCounts 529 Fund Advisor Plan Aggressive TX Lonestar 529 Plan Advisor Age Based SC Future Scholar 529 (Advisor) Aggressive Track Minimum Maximum Average

34 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 34 of 59 People Evaluating a portfolio manager s skill is a crucial part of selecting any investment, but it s difficult to do for 529 plans. Mutual funds must disclose the names and start dates of their portfolio managers to the Securities and Exchange Commission, but 529 plans are not bound by such rules from the Municipal Securities Rulemaking Board. Therefore, it is challenging for 529 plan participants to identify who is managing their college savings. Because 529 plans typically invest in mutual funds that are tracked in Morningstar s database, Morningstar benefits from a depth and breadth of knowledge on mutual funds and their managers. In 2011, Morningstar began issuing the Morningstar Analyst Rating for mutual funds, which is a summary expression of Morningstar s forward-looking analysis of a fund. As part of this assessment, Morningstar s analysts assign a rating of positive, neutral, or negative to each fund s management team based on its talent, tenure, and resources. This rating is called the People rating. To evaluate the managers represented in 529 college-savings plans, Morningstar looks at the People ratings assigned to the plans ultimate mutual fund investments. A considerable portion of the underlying funds used in the 529 universe have received a People rating for their management teams. Most plans underlying investments receive positive People ratings from Morningstar, and almost no plans have underlying funds with a negative People rating. This is unsurprising because both program managers and individual portfolio managers go through a rigorous selection process to win a 529 contract, and subpar asset managers should be screened out. Plans with high portions of underlying funds with positive People ratings include Montana s MFESP Investment Plan, Alabama s CollegeCounts 529 Fund, Virginia s Virginia529 invest plan, and the Utah Educational Savings Plan. MFESP Investment Plan and Utah Educational Savings Plan are examples of closed-architecture plans featuring Vanguard investments with positive People ratings, while Alabama s CollegeCounts 529 Fund and Virginia529 invest plan are openarchitecture plans that benefited from a wider-reaching manager-selection process. Several plans on the list have no underlying funds with positive People ratings, but that is not necessarily cause for alarm. In all cases where a plan has no underlying funds with a positive People rating, the plan s underlying funds have little to no Morningstar Analyst Rating coverage. While Morningstar s People rating is qualitative and forward-looking, college

35 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 35 of 59 savers can use quantitative tools, such as manager tenure, to evaluate the portfolio managers running the 529 plan s assets. Several of the same plans with strong underlying People ratings also have long average manager tenure. Montana s MFESP Investment Plan, Alabama s CollegeCounts 529 Fund, and the Virginia529 invest plan feature some of the industry s longest-tenured managers. Like the People rating, the 529 industry s average manager tenure exceeds that of the mutual fund industry s: The average manager in the 529 industry has been running his or her fund for nine years, compared with five years for the open-end mutual fund industry. It would be remiss to suggest that the only people who influence the quality of a 529 plan are the portfolio managers of the underlying holdings. The asset-allocators who set the age-based options glide path and often choose the underlying investments play a key role in the quality of the 529 plan. Investment consultants, who are often employed by the state to help it monitor the plan s program manager, also have an influence over the plan s construction. Morningstar typically interviews these asset allocators and consultants to help determine the plan s qualitative, forward-looking People rating, which is a component of the Morningstar Analyst Rating for 529 College-Savings Plans. These parties influence on 529 plans can vary, so their relative impact is qualitatively rather than formulaically incorporated into the People rating. Of course, the states themselves also affect the quality of a 529 plan, but their efficacy is addressed in the Parent portion of the Analyst Rating for 529 plans.

36 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 36 of 59 Exhibit Plans Underlying People Ratings Data as of 3/14/13. Source: Morningstar, Inc. State Plan Name Program Manager People Rating for Underlying Funds Positive Neutral Negative No Rating MT MFESP Investment Plan College Savings Bank AL CollegeCounts 529 Fund Union Bank & Trust Company (Lincoln, NE) VA Virginia529 invest Virginia College Savings Plan UT Utah Educational Savings Plan Utah Educational Savings Plan NY New York's 529 Program (Direct) Upromise Investments, Inc VA CollegeAmerica American Funds MO MOST Missouri's 529 Plan Upromise Investments, Inc NM Scholar'sEdge OFI Private Investments Inc NV The Vanguard 529 College Savings Plan Upromise Investments, Inc MD Maryland College Investment Plan T. Rowe Price Associates, Inc MA U.Fund College Investing Plan Fidelity Investments AZ Fidelity Arizona College Savings Plan Fidelity Investments OR MFS 529 Savings Plan MFS DE Delaware College Investment Plan Fidelity Investments NH UNIQUE College Investing Plan Fidelity Investments SD CollegeAccess 529 Allianz Global Investors Dist., LLC IA Iowa Advisor 529 Plan Upromise Investments, Inc OH CollegeAdvantage 529 Savings Plan Ohio Tuition Trust Authority KS Schwab 529 College Savings Plan American Century Inv Mgt, Inc AK John Hancock Freedom 529 T. Rowe Price Associates, Inc ME NextGen College Investing Plan Select Merrill Lynch Pierce Fenner & Smith AK University of Alaska College Savings Plan T. Rowe Price Associates, Inc IN CollegeChoice 529 Direct Savings Plan Upromise Investments, Inc CO Scholars Choice College Savings Program Legg Mason Global Asset Allocation, LLC IL Bright Start College Savings (Direct) OFI Private Investments Inc WV SMART529 WV Direct College Savings Plan Hartford Life Insurance Company AK T. Rowe Price College Savings Plan T. Rowe Price Associates, Inc KS LearningQuest 529 Program (Direct) American Century Inv Mgt, Inc NH Fidelity Advisor 529 Plan Fidelity Investments NM The Education Plan OFI Private Investments Inc NE NEST Direct College Savings Plan First National Bank Of Omaha NE TD Ameritrade 529 College Savings Plan First National Bank Of Omaha NJ Franklin Templeton 529 Coll Savings Plan Franklin Templeton Distributors Inc OK OklahomaDream529 TIAA Tuition Financing, Inc TX Texas College Savings Plan OFI Private Investments Inc IL Bright Directions Coll Savings Program Union Bank & Trust Company (Lincoln, NE) NE State Farm College Savings Plan First National Bank Of Omaha MI MI 529 Advisor TIAA Tuition Financing, Inc NJ NJBEST 529 College Savings Plan Franklin Templeton Distributors Inc ID IDeal - Idaho College Savings Program Upromise Investments, Inc Exhibit 15 continues on the following page.

37 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 37 of 59 Exhibit 15 continued 529 Plans Underlying People Ratings Data as of 3/14/13. Source: Morningstar, Inc. State Plan Name Program Manager People Rating for Underlying Funds Positive Neutral Negative No Rating AR GIFT College Investing Plan Upromise Investments, Inc HI HI529 - Hawaii's College Savings Program Upromise Investments, Inc AL CollegeCounts 529 Fund Advisor Plan Union Bank & Trust Company (Lincoln, NE) TX Lonestar 529 Plan OFI Private Investments Inc OH BlackRock CollegeAdvantage 529 Plan BlackRock Advisors LLC NE NEST Advisor College Savings Plan First National Bank Of Omaha CO CollegeInvest Direct Portfolio Upromise Investments, Inc IL Bright Start Coll Savings (Advisor) OFI Private Investments Inc IA College Savings Iowa 529 Plan Vanguard Group, Inc NC National College Savings Program College Foundation, Inc KS LearningQuest 529 Program (Advisor) American Century Inv Mgt, Inc WV SMART529 Select College Savings Plan Hartford Life Insurance Company NV Putnam 529 for America Putnam Investment Management, LLC MO MOST 529 Advisor Plan Upromise Investments, Inc OR Oregon College Savings Plan TIAA Tuition Financing, Inc SC Future Scholar 529 (Advisor) Columbia Management Inv Distri, Inc ME NextGen College Investing Plan Direct Merrill Lynch Pierce Fenner & Smith NY New York's 529 Program (Advisor-Guided) Upromise Investments, Inc SC Future Scholar 529 (Direct) Columbia Management Inv Distri, Inc NV USAA College Savings Plan Upromise Investments, Inc ND College SAVE Upromise Investments, Inc PA Pennsylvania 529 Investment Plan Pennsylvania Treasury Department CA ScholarShare College Savings Plan TIAA Tuition Financing, Inc IN CollegeChoice Advisor 529 Savings Plan Upromise Investments, Inc DC DC College Savings Program Calvert Investment Management, Inc WV The Hartford SMART529 Hartford Life Insurance Company CT Connecticut Higher Education Trust TIAA Tuition Financing, Inc CT CHET Advisor College Savings Plan Hartford Life Insurance Company MS Mississippi Affordable (Advisor) TIAA Tuition Financing, Inc OK Oklahoma College Savings Plan TIAA Tuition Financing, Inc AR ishares 529 Plan Upromise Investments, Inc MS Mississippi Affordable (Direct) TIAA Tuition Financing, Inc MI Michigan Education Savings Program TIAA Tuition Financing, Inc KY Kentucky Education Savings Plan Trust TIAA Tuition Financing, Inc RI CollegeBoundfund AllianceBernstein LP VT Vermont Higher Education Investment Plan TIAA Tuition Financing, Inc GA Path2College 529 Plan TIAA Tuition Financing, Inc MN Minnesota College Savings Plan TIAA Tuition Financing, Inc AZ Ivy Funds InvestEd 529 Plan Waddell & Reed Inc NA NA NA NA

38 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 38 of 59 Exhibit 16 Average Manager Tenure by 529 Plan Data as of 3/14/13. Source: Morningstar, Inc. State Plan Name Program Manager Average Manager Tenure for Underlying Funds (Years) MT MFESP Investment Plan College Savings Bank AL CollegeCounts 529 Fund Union Bank & Trust Company (Lincoln, NE) NJ Franklin Templeton 529 Coll Savings Plan Franklin Templeton Distributors Inc NJ NJBEST 529 College Savings Plan Franklin Templeton Distributors Inc VA Virginia529 invest Virginia College Savings Plan NY New York's 529 Program (Direct) Upromise Investments, Inc NE TD Ameritrade 529 College Savings Plan First National Bank Of Omaha NE NEST Advisor College Savings Plan First National Bank Of Omaha NE NEST Direct College Savings Plan First National Bank Of Omaha KS Schwab 529 College Savings Plan American Century Inv Mgt, Inc OH CollegeAdvantage 529 Savings Plan Ohio Tuition Trust Authority 9.88 IL Bright Directions Coll Savings Program Union Bank & Trust Company (Lincoln, NE) 9.76 VA CollegeAmerica American Funds 9.50 NV The Vanguard 529 College Savings Plan Upromise Investments, Inc MD Maryland College Investment Plan T. Rowe Price Associates, Inc UT Utah Educational Savings Plan Utah Educational Savings Plan 9.09 AZ Ivy Funds InvestEd 529 Plan Waddell & Reed Inc 8.79 AL CollegeCounts 529 Fund Advisor Plan Union Bank & Trust Company (Lincoln, NE) 8.55 IA Iowa Advisor 529 Plan Upromise Investments, Inc CO Scholars Choice College Savings Program Legg Mason Global Asset Allocation, LLC 8.30 MS Mississippi Affordable (Advisor) TIAA Tuition Financing, Inc AK John Hancock Freedom 529 T. Rowe Price Associates, Inc WV SMART529 WV Direct College Savings Plan Hartford Life Insurance Company 7.97 AK University of Alaska College Savings Plan T. Rowe Price Associates, Inc AK T. Rowe Price College Savings Plan T. Rowe Price Associates, Inc IL Bright Start College Savings (Direct) OFI Private Investments Inc 7.90 MS Mississippi Affordable (Direct) TIAA Tuition Financing, Inc KS LearningQuest 529 Program (Direct) American Century Inv Mgt, Inc SD CollegeAccess 529 Allianz Global Investors Dist., LLC 7.71 OR Oregon College Savings Plan TIAA Tuition Financing, Inc DE Delaware College Investment Plan Fidelity Investments 7.45 MA U.Fund College Investing Plan Fidelity Investments 7.45 NH UNIQUE College Investing Plan Fidelity Investments 7.45 AZ Fidelity Arizona College Savings Plan Fidelity Investments 7.45 AR GIFT College Investing Plan Upromise Investments, Inc ID IDeal - Idaho College Savings Program Upromise Investments, Inc IN CollegeChoice 529 Direct Savings Plan Upromise Investments, Inc NY New York's 529 Program (Advisor-Guided) Upromise Investments, Inc OR MFS 529 Savings Plan MFS 7.17 HI HI529 - Hawaii's College Savings Program Upromise Investments, Inc Exhibit 16 continues on the following page.

39 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 39 of 59 Exhibit 16 continued Average Manager Tenure by 529 Plan Data as of 3/14/13. Source: Morningstar, Inc. State Plan Name Program Manager Average Manager Tenure for Underlying Funds (Years) CA ScholarShare College Savings Plan TIAA Tuition Financing, Inc IA College Savings Iowa 529 Plan Vanguard Group, Inc NC National College Savings Program College Foundation, Inc CO CollegeInvest Direct Portfolio Upromise Investments, Inc NM The Education Plan OFI Private Investments Inc 6.79 MO MOST 529 Advisor Plan Upromise Investments, Inc RI CollegeBoundfund AllianceBernstein LP 6.74 WV SMART529 Select College Savings Plan Hartford Life Insurance Company 6.73 KY Kentucky Education Savings Plan Trust TIAA Tuition Financing, Inc OK Oklahoma College Savings Plan TIAA Tuition Financing, Inc KS LearningQuest 529 Program (Advisor) American Century Inv Mgt, Inc ME NextGen College Investing Plan Select Merrill Lynch Pierce Fenner & Smith 6.40 OK OklahomaDream529 TIAA Tuition Financing, Inc MO MOST Missouri's 529 Plan Upromise Investments, Inc MI MI 529 Advisor TIAA Tuition Financing, Inc VT Vermont Higher Education Investment Plan TIAA Tuition Financing, Inc CT Connecticut Higher Education Trust TIAA Tuition Financing, Inc ND College SAVE Upromise Investments, Inc GA Path2College 529 Plan TIAA Tuition Financing, Inc NM Scholar'sEdge OFI Private Investments Inc 6.02 MN Minnesota College Savings Plan TIAA Tuition Financing, Inc NV Putnam 529 for America Putnam Investment Management, LLC 5.75 IN CollegeChoice Advisor 529 Savings Plan Upromise Investments, Inc NH Fidelity Advisor 529 Plan Fidelity Investments 5.50 TX Texas College Savings Plan OFI Private Investments Inc 5.35 PA Pennsylvania 529 Investment Plan Pennsylvania Treasury Department 5.35 IL Bright Start Coll Savings (Advisor) OFI Private Investments Inc 5.33 OH BlackRock CollegeAdvantage 529 Plan BlackRock Advisors LLC 5.28 MI Michigan Education Savings Program TIAA Tuition Financing, Inc SC Future Scholar 529 (Advisor) Columbia Management Inv Distri, Inc NV USAA College Savings Plan Upromise Investments, Inc CT CHET Advisor College Savings Plan Hartford Life Insurance Company 4.80 SC Future Scholar 529 (Direct) Columbia Management Inv Distri, Inc TX Lonestar 529 Plan OFI Private Investments Inc 4.58 WV The Hartford SMART529 Hartford Life Insurance Company 4.33 NE State Farm College Savings Plan First National Bank Of Omaha 4.25 DC DC College Savings Program Calvert Investment Management, Inc AR ishares 529 Plan Upromise Investments, Inc ME NextGen College Investing Plan Direct Merrill Lynch Pierce Fenner & Smith 3.42

40 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 40 of 59 Parent College savers use 529 plans to make long-term investments with a critical goal of saving for college. Given the high financial and emotional stakes involved, college savers should feel confident about the parent organizations overseeing their 529 investments. While a mutual fund s parent is the asset-management company offering the fund, a 529 plan s parent role is split between the plan s program manager (often, an asset management company) and its offering state. Frequently the program manager has heavy input on the plan s investment options and pricing, while the state hires the program manager and signs off on all investment decisions. Some states also have a dedicated board that has fiduciary responsibilities over a plan, similar to a mutual fund s board of directors. The plans vary in the way they split the program manager s responsibilities and the state s responsibilities. In some cases, the program manager takes a leadership role in investment decisions, while in other cases the state takes the reins and only uses the program manager for record-keeping and marketing. Regardless of how duties are divided, Morningstar assigns positive Parent ratings to organizations that consistently put college savers before business or political interests. To arrive at a plan s Parent rating (one of five components that make up the Morningstar Analyst Rating for 529 plans), Morningstar qualitatively evaluates the stewardship practices of the program manager, as well as the due diligence process of the state governing the 529 plan. There s no formula that drives the final Parent rating. The program manager and state involvement varies from plan to plan, and the Parent rating is a qualitative assessment. While the program manager may have more day-to-day involvement with 529 investments, states have a major influence on whether program managers have a presence in the industry at all. Many states voted with their feet, especially after 2008, by hiring a new program manager when their old contracts ended. For instance, Ohio cast off Putnam and retained BlackRock in 2010 as the program manager for the advisor-sold plan. More recently, New York replaced Columbia with JPMorgan to run its advisor-sold plan. These contract changes have led to significant changes in market share by program manager, with some relative newcomers, like JPMorgan, getting immediate scale. TIAA-CREF, for example, was hired to run California s 529 plan in 2011 and has edged in front of Fidelity for the second-largest slice of market share for direct-sold 529 assets. TIAA-CREF took over California s plan from Fidelity. TIAA-CREF remains a distant second in market share to

41 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 41 of 59 Upromise, which continues to dominate the direct-sold 529 industry. Exhibit 17 shows a full breakdown of the players in the direct-sold 529 industry. Of the advisor-sold side of the industry, American Funds continues to drastically outweigh every other program manager. The firm, an early entrant into the 529 industry, holds $37 billion in assets through Virginia CollegeAmerica. That asset base is more than 5 times larger than Rhode Island s CollegeBoundfund, which is run by AllianceBernstein and has the second-largest share of advisor-sold assets. Exhibit 18 has a full list of the 529 industry s program managers for advisor-sold plans. Exhibit 17 Direct-Sold 529 Plan Assets by Program Manager Data as of 2/28/13. Source: Morningstar, Inc. Program Manager Total Direct-Sold Assets USD Direct-Sold Assets Upromise Investments, Inc. 27,958,777, TIAA Tuition Financing, Inc. 15,702,234, Fidelity Investments 12,810,242, Utah Educational Savings Plan 5,400,378, T. Rowe Price Associates, Inc. 4,815,467, American Century Inv Mgt, Inc. 3,436,718, Vanguard Group, Inc. 3,199,439, OFI Private Investments Inc 3,121,544, Ohio Tuition Trust Authority 2,977,836, Virginia College Savings Plan 2,203,879, First National Bank Of Omaha 1,934,789, Pennsylvania Treasury Department 1,259,186, College Foundation, Inc. 1,089,301, Franklin Templeton Distributors Inc 725,052, Columbia Management Inv Distri, Inc. 516,086, Hartford Life Insurance Company 448,652, Florida Prepaid College Board 293,317, AllianceBernstein LP 176,015, Union Bank & Trust Company (Lincoln, NE) 142,911, College Savings Bank 103,803, Merrill Lynch Pierce Fenner & Smith 98,433, Allianz Global Investors Dist., LLC 24,826, State of Tennessee 2,428, American Funds 0.00 BlackRock Advisors LLC 0.00 Calvert Investment Management, Inc Legg Mason Global Asset Allocation, LLC 0.00 Louisiana Tuition Trust Authority 0.00 MFS 0.00 Putnam Investment Management, LLC 0.00 Waddell & Reed Inc 0.00

42 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 42 of 59 In addition to prompting changes in program-manager market share, new 529 contracts often affect plans individual investment options. Frequently, the new program manager overhauls the plan s investment options, often introducing all new choices for participants. Exhibit 19 shows the average age of the investment options in each 529 plan. The plans with younger vintage investment options often have newer program managers. Plans that were recently overhauled include Wisconsin s Tomorrow s Scholar 529 Plan and Wisconsin s Edvest 529 Plan, New York s Advisor- Guided 529 Program, and California s ScholarShare College Savings Plan. The TNStars College Savings 529 Program is a brand-new program, launched in Tennessee in Exhibit 18 Advisor-Sold 529 Plan Assets by Program Manager Data as of 2/28/13. Source: Morningstar, Inc. Program Manager Total Advisor-Sold Assets USD Advisor-Sold Assets American Funds 36,743,944, AllianceBernstein LP 7,245,592, Merrill Lynch Pierce Fenner & Smith 6,448,559, Upromise Investments, Inc. 4,125,120, BlackRock Advisors LLC 3,989,573, Fidelity Investments 3,687,821, OFI Private Investments Inc 3,427,504, T. Rowe Price Associates, Inc. 3,376,499, Legg Mason Global Asset Allocation, LLC 3,006,137, Franklin Templeton Distributors Inc 2,355,245, Union Bank & Trust Company (Lincoln, NE) 1,974,875, TIAA Tuition Financing, Inc. 1,666,719, Hartford Life Insurance Company 1,491,034, Columbia Management Inv Distri, Inc. 1,124,696, Allianz Global Investors Dist., LLC 1,059,905, First National Bank Of Omaha 1,004,362, MFS 865,328, Waddell & Reed Inc 328,542, Putnam Investment Management, LLC 287,879, American Century Inv Mgt, Inc. 210,552, Ohio Tuition Trust Authority 0.00 Florida Prepaid College Board 0.00 State of Tennessee 0.00 College Foundation, Inc Utah Educational Savings Plan 0.00 Virginia College Savings Plan 0.00 College Savings Bank 0.00 Calvert Investment Management, Inc Louisiana Tuition Trust Authority 0.00 Vanguard Group, Inc Pennsylvania Treasury Department 0.00

43 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 43 of 59 Churn in a plan s investment options is not necessarily unwelcome for investors. For instance, if a 529 plan replaces underlying investments run by middling or poor stewards with investment managers with solid stewardship reputations, college savers are probably better off. Exhibit 20 shows the asset managers associated with each 529 plan, as well as the percentage of plan assets run by each asset manager. The data is particularly revealing for open-architecture plans, which include a variety of asset managers: College savers can see what portion of plan assets are run by third-party asset managers and assess their stewardship practices. The Morningstar Analyst Rating for funds and component Parent ratings are a good starting point for learning more about a particular firm s stewardship strengths and weaknesses.

44 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 44 of 59 Exhibit 19 Average Age, Recent Inceptions of Investment Options by 529 Plan Data as of 3/14/13. Source: Morningstar, Inc. State Plan Name Investment Options' Average Age Years Number of Investment Options Incepted After 1/1/2012 Percent of Investment Options Incepted After 1/1/2012 AZ Ivy Funds InvestEd 529 Plan IA College Savings Iowa 529 Plan OR MFS 529 Savings Plan MS Mississippi Affordable (Advisor) FL Florida College Investment Plan KY Kentucky Education Savings Plan Trust NV USAA College Savings Plan NV The Vanguard 529 College Savings Plan AK University of Alaska Coll Savings Plan AK T. Rowe Price College Savings Plan MN Minnesota College Savings Plan WV SMART529 WV Direct College Savings Plan NH Fidelity Advisor 529 Plan UT Utah Educational Savings Plan NY New York's 529 Program (Direct) DC DC College Savings Program CO Scholars Choice College Savings Program VA Virginia529 invest MD Maryland College Investment Plan AK John Hancock Freedom RI CollegeBoundfund WV The Hartford SMART KS Schwab 529 College Savings Plan WV SMART529 Select College Savings Plan CO CollegeInvest Direct Portfolio ME NextGen College Investing Plan Select SD CollegeAccess AR GIFT College Investing Plan KS LearningQuest 529 Program (Direct) NJ Franklin Templeton 529 Coll Savings Plan OH CollegeAdvantage 529 Savings Plan NM Scholar'sEdge NJ NJBEST 529 College Savings Plan CT Connecticut Higher Education Trust KS LearningQuest 529 Program (Advisor) VA CollegeAmerica DE Delaware College Investment Plan NH UNIQUE College Investing Plan ND College SAVE MA U.Fund College Investing Plan Exhibit 19 continues on the following page.

45 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 45 of 59 Exhibit 19 continued Average Age, Recent Inceptions of Investment Options by 529 Plan Data as of 3/14/13. Source: Morningstar, Inc. State Plan Name Investment Options' Average Age Years Number of Investment Options Incepted After 1/1/2012 Percent of Investment Options Incepted After 1/1/2012 PA Pennsylvania 529 Investment Plan VT Vermont Higher Education Investment Plan IA Iowa Advisor 529 Plan NM The Education Plan IL Bright Directions Coll Savings Program MO MOST Missouri's 529 Plan OK Oklahoma College Savings Plan HI HI529 - Hawaii's College Savings Program ID IDeal - Idaho College Savings Program AZ Fidelity Arizona College Savings Plan SC Future Scholar 529 (Direct) IL Bright Start College Savings (Direct) TX Lonestar 529 Plan IL Bright Start Coll Savings (Advisor) TX Texas College Savings Plan SC Future Scholar 529 (Advisor) MO MOST 529 Advisor Plan NE State Farm College Savings Plan IN CollegeChoice Advisor 529 Savings Plan ME NextGen College Investing Plan Direct IN CollegeChoice 529 Direct Savings Plan AR ishares 529 Plan MI MI 529 Advisor OK OklahomaDream OH BlackRock CollegeAdvantage 529 Plan MS Mississippi Affordable (Direct) AL CollegeCounts 529 Fund CT CHET Advisor College Savings Plan RI CollegeBoundfund Direct OR Oregon College Savings Plan NV Putnam 529 for America AL CollegeCounts 529 Fund Advisor Plan MT MFESP Investment Plan GA Path2College 529 Plan NE NEST Direct College Savings Plan NE NEST Advisor College Savings Plan NC National College Savings Program NE TD Ameritrade 529 College Savings Plan MI Michigan Education Savings Program CA ScholarShare College Savings Plan Exhibit 19 continues on the following page.

46 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 46 of 59 Exhibit 19 continued Average Age, Recent Inceptions of Investment Options by 529 Plan Data as of 3/14/13. Source: Morningstar, Inc. State Plan Name Investment Options' Average Age Years Number of Investment Options Incepted After 1/1/2012 Percent of Investment Options Incepted After 1/1/2012 NV SSgA Upromise 529 Plan NY New York's 529 Program (Advisor-Guided) TN TNStars College Saving 529 Program WI EdVest 529 Plan WI Tomorrow's Scholar 529 Plan LA The Louisiana START Saving For College NA 0 NA

47 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 47 of 59 Exhibit 20 Allocation to Asset Manager by 529 Plan Data as of 2/28/13. Source: Morningstar, Inc. State Plan Name Firm Name Allocation OH BlackRock CollegeAdvantage 529 Plan BlackRock OH BlackRock CollegeAdvantage 529 Plan Rainier 0.35 OH BlackRock CollegeAdvantage 529 Plan Wells Fargo Advantage 2.72 OH BlackRock CollegeAdvantage 529 Plan ishares 6.47 IL Bright Directions Coll Savings Program American Century Investments 1.52 IL Bright Directions Coll Savings Program Ariel Investments, LLC 0.40 IL Bright Directions Coll Savings Program Artisan 1.87 IL Bright Directions Coll Savings Program BlackRock 8.72 IL Bright Directions Coll Savings Program Delaware Investments 2.35 IL Bright Directions Coll Savings Program Dimensional Fund Advisors IL Bright Directions Coll Savings Program Dodge & Cox 4.20 IL Bright Directions Coll Savings Program Eagle Funds 1.51 IL Bright Directions Coll Savings Program Franklin Templeton Investment Funds 2.09 IL Bright Directions Coll Savings Program ING Funds 1.76 IL Bright Directions Coll Savings Program John Hancock 0.07 IL Bright Directions Coll Savings Program Northern Funds IL Bright Directions Coll Savings Program OppenheimerFunds 4.39 IL Bright Directions Coll Savings Program PIMCO IL Bright Directions Coll Savings Program Sit 0.49 IL Bright Directions Coll Savings Program T. Rowe Price IL Bright Directions Coll Savings Program Touchstone 0.06 IL Bright Directions Coll Savings Program William Blair 0.59 IL Bright Start Coll Savings (Advisor) NA IL Bright Start Coll Savings (Advisor) American Century Investments IL Bright Start Coll Savings (Advisor) OppenheimerFunds IL Bright Start College Savings (Direct) NA IL Bright Start College Savings (Direct) American Century Investments 1.03 IL Bright Start College Savings (Direct) OppenheimerFunds IL Bright Start College Savings (Direct) Vanguard CT CHET Advisor College Savings Plan Hartford Mutual Funds CT CHET Advisor College Savings Plan PowerShares 0.97 CT CHET Advisor College Savings Plan State Street Global Advisors 2.56 ND College SAVE Vanguard IA College Savings Iowa 529 Plan Vanguard SD CollegeAccess 529 Allianz Funds SD CollegeAccess 529 Dodge & Cox 0.81 SD CollegeAccess 529 Dreyfus 1.20 SD CollegeAccess 529 Franklin Templeton Investment Funds 2.72 SD CollegeAccess 529 ING Funds 2.87 SD CollegeAccess 529 PIMCO Exhibit 20 continues on the following page.

48 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 48 of 59 Exhibit 20 continued Allocation to Asset Manager by 529 Plan Data as of 2/28/13. Source: Morningstar, Inc. State Plan Name Firm Name Allocation SD CollegeAccess 529 RS Funds 0.82 SD CollegeAccess 529 Royce 1.98 SD CollegeAccess 529 TIAA-CREF Mutual Funds 8.83 SD CollegeAccess 529 Thornburg 2.92 OH CollegeAdvantage 529 Savings Plan GE Asset Management 0.83 OH CollegeAdvantage 529 Savings Plan Highland Funds 0.83 OH CollegeAdvantage 529 Savings Plan OppenheimerFunds 0.56 OH CollegeAdvantage 529 Savings Plan PIMCO 5.12 OH CollegeAdvantage 529 Savings Plan Vanguard VA CollegeAmerica American Funds RI CollegeBoundfund NA NA IN CollegeChoice 529 Direct Savings Plan Dodge & Cox 3.62 IN CollegeChoice 529 Direct Savings Plan Legg Mason 1.80 IN CollegeChoice 529 Direct Savings Plan Natixis Funds 6.17 IN CollegeChoice 529 Direct Savings Plan Scout 2.84 IN CollegeChoice 529 Direct Savings Plan Vanguard IN CollegeChoice Advisor 529 Savings Plan Artio Global 2.62 IN CollegeChoice Advisor 529 Savings Plan BlackRock 4.60 IN CollegeChoice Advisor 529 Savings Plan Columbia 5.13 IN CollegeChoice Advisor 529 Savings Plan PIMCO 4.77 IN CollegeChoice Advisor 529 Savings Plan T. Rowe Price 3.78 IN CollegeChoice Advisor 529 Savings Plan ishares AL CollegeCounts 529 Fund PIMCO 3.67 AL CollegeCounts 529 Fund T. Rowe Price 1.55 AL CollegeCounts 529 Fund Vanguard AL CollegeCounts 529 Fund Advisor Plan American Century Investments 0.20 AL CollegeCounts 529 Fund Advisor Plan BlackRock AL CollegeCounts 529 Fund Advisor Plan Cohen & Steers 7.14 AL CollegeCounts 529 Fund Advisor Plan Credit Suisse (New York, NY) 1.42 AL CollegeCounts 529 Fund Advisor Plan Dimensional Fund Advisors 1.53 AL CollegeCounts 529 Fund Advisor Plan Franklin Templeton Investment Funds 1.78 AL CollegeCounts 529 Fund Advisor Plan ING Funds 2.76 AL CollegeCounts 529 Fund Advisor Plan Lazard 3.35 AL CollegeCounts 529 Fund Advisor Plan Lord Abbett 2.13 AL CollegeCounts 529 Fund Advisor Plan Neuberger Berman 8.35 AL CollegeCounts 529 Fund Advisor Plan Northern Funds AL CollegeCounts 529 Fund Advisor Plan PIMCO AL CollegeCounts 529 Fund Advisor Plan T. Rowe Price AL CollegeCounts 529 Fund Advisor Plan Touchstone 1.76 AL CollegeCounts 529 Fund Advisor Plan William Blair 1.13 Exhibit 20 continues on the following page.

49 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 49 of 59 Exhibit 20 continued Allocation to Asset Manager by 529 Plan Data as of 2/28/13. Source: Morningstar, Inc. State Plan Name Firm Name Allocation CO CollegeInvest Direct Portfolio Vanguard CT Connecticut Higher Education Trust Dimensional Fund Advisors 3.43 CT Connecticut Higher Education Trust Franklin Templeton Investment Funds 5.57 CT Connecticut Higher Education Trust GE Asset Management 0.64 CT Connecticut Higher Education Trust GMO 0.09 CT Connecticut Higher Education Trust T. Rowe Price 0.05 CT Connecticut Higher Education Trust TIAA-CREF Mutual Funds CT Connecticut Higher Education Trust Thornburg 0.15 DC DC College Savings Program Calvert Investments, Inc DC DC College Savings Program State Street Master Funds DE Delaware College Investment Plan Acadian Funds 0.01 DE Delaware College Investment Plan Artisan 0.00 DE Delaware College Investment Plan Aston 0.03 DE Delaware College Investment Plan BlackRock 0.01 DE Delaware College Investment Plan Causeway 0.01 DE Delaware College Investment Plan Credit Suisse (New York, NY) 0.00 DE Delaware College Investment Plan Eaton Vance 0.01 DE Delaware College Investment Plan Fidelity Investments DE Delaware College Investment Plan Harbor 0.01 DE Delaware College Investment Plan Invesco 0.01 DE Delaware College Investment Plan JPMorgan 0.03 DE Delaware College Investment Plan Legg Mason 0.01 DE Delaware College Investment Plan MFS 0.02 DE Delaware College Investment Plan Natixis Funds 0.00 DE Delaware College Investment Plan OppenheimerFunds 0.01 DE Delaware College Investment Plan PIMCO 0.01 DE Delaware College Investment Plan Royce 0.00 DE Delaware College Investment Plan William Blair 0.01 NH Fidelity Advisor 529 Plan Fidelity Investments AZ Fidelity Arizona College Savings Plan Acadian Funds 0.03 AZ Fidelity Arizona College Savings Plan Artisan 0.03 AZ Fidelity Arizona College Savings Plan Aston 0.20 AZ Fidelity Arizona College Savings Plan BlackRock 0.05 AZ Fidelity Arizona College Savings Plan Causeway 0.08 AZ Fidelity Arizona College Savings Plan Credit Suisse (New York, NY) 0.02 AZ Fidelity Arizona College Savings Plan Eaton Vance 0.04 AZ Fidelity Arizona College Savings Plan Fidelity Investments AZ Fidelity Arizona College Savings Plan Harbor 0.09 AZ Fidelity Arizona College Savings Plan Invesco 0.04 AZ Fidelity Arizona College Savings Plan JPMorgan 0.20 Exhibit 20 continues on the following page.

50 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 50 of 59 Exhibit 20 continued Allocation to Asset Manager by 529 Plan Data as of 2/28/13. Source: Morningstar, Inc. State Plan Name Firm Name Allocation AZ Fidelity Arizona College Savings Plan Legg Mason 0.05 AZ Fidelity Arizona College Savings Plan MFS 0.16 AZ Fidelity Arizona College Savings Plan Natixis Funds 0.02 AZ Fidelity Arizona College Savings Plan OppenheimerFunds 0.08 AZ Fidelity Arizona College Savings Plan PIMCO 0.07 AZ Fidelity Arizona College Savings Plan Royce 0.02 AZ Fidelity Arizona College Savings Plan William Blair 0.08 NJ Franklin Templeton 529 Coll Savings Plan Franklin Templeton Investment Funds NJ Franklin Templeton 529 Coll Savings Plan JPMorgan 2.37 SC Future Scholar 529 (Advisor) Columbia SC Future Scholar 529 (Advisor) Vanguard SC Future Scholar 529 (Advisor) ishares 6.90 SC Future Scholar 529 (Direct) Columbia SC Future Scholar 529 (Direct) Vanguard SC Future Scholar 529 (Direct) ishares 6.97 AR GIFT College Investing Plan Vanguard HI HI529 - Hawaii's College Savings Program Vanguard ID IDeal - Idaho College Savings Program Vanguard IA Iowa Advisor 529 Plan American Century Investments IA Iowa Advisor 529 Plan Columbia 3.12 IA Iowa Advisor 529 Plan Delaware Investments 0.88 IA Iowa Advisor 529 Plan Franklin Templeton Investment Funds 5.29 IA Iowa Advisor 529 Plan Harbor 3.14 IA Iowa Advisor 529 Plan Pioneer Investments 1.52 IA Iowa Advisor 529 Plan Vanguard AR ishares 529 Plan BlackRock 0.01 AR ishares 529 Plan ishares AZ Ivy Funds InvestEd 529 Plan Waddell & Reed AK John Hancock Freedom 529 American Funds 2.47 AK John Hancock Freedom 529 John Hancock AK John Hancock Freedom 529 OppenheimerFunds 4.80 AK John Hancock Freedom 529 T. Rowe Price KY Kentucky Education Savings Plan Trust TIAA-CREF Mutual Funds KS LearningQuest 529 Program (Advisor) American Beacon 1.03 KS LearningQuest 529 Program (Advisor) American Century Investments KS LearningQuest 529 Program (Advisor) Columbia 8.71 KS LearningQuest 529 Program (Advisor) OppenheimerFunds 4.28 KS LearningQuest 529 Program (Advisor) Principal Funds 8.36 KS LearningQuest 529 Program (Direct) American Century Investments KS LearningQuest 529 Program (Direct) Vanguard Exhibit 20 continues on the following page.

51 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 51 of 59 Exhibit 20 continued Allocation to Asset Manager by 529 Plan Data as of 2/28/13. Source: Morningstar, Inc. State Plan Name Firm Name Allocation TX Lonestar 529 Plan Dreyfus TX Lonestar 529 Plan OppenheimerFunds TX Lonestar 529 Plan TIAA-CREF Mutual Funds TX Lonestar 529 Plan Thornburg MD Maryland College Investment Plan T. Rowe Price MT MFESP Investment Plan Vanguard OR MFS 529 Savings Plan MFS MI MI 529 Advisor Allianz Funds MI MI 529 Advisor PIMCO MI MI 529 Advisor TIAA-CREF Mutual Funds MI Michigan Education Savings Program TIAA-CREF Mutual Funds MN Minnesota College Savings Plan TIAA-CREF Mutual Funds MS Mississippi Affordable (Advisor) TIAA-CREF Mutual Funds MS Mississippi Affordable (Direct) TIAA-CREF Mutual Funds MO MOST 529 Advisor Plan American Century Investments 2.65 MO MOST 529 Advisor Plan American Funds MO MOST 529 Advisor Plan Columbia 4.44 MO MOST 529 Advisor Plan DWS Investments MO MOST 529 Advisor Plan Franklin Templeton Investment Funds 8.02 MO MOST 529 Advisor Plan Invesco 6.41 MO MOST 529 Advisor Plan PIMCO 9.62 MO MOST 529 Advisor Plan T. Rowe Price 4.28 MO MOST 529 Advisor Plan Upromise Investments, Inc MO MOST Missouri's 529 Plan Vanguard NC National College Savings Program Vanguard NE NEST Advisor College Savings Plan American Century Investments 9.75 NE NEST Advisor College Savings Plan Dreyfus 6.91 NE NEST Advisor College Savings Plan Federated NE NEST Advisor College Savings Plan Goldman Sachs NE NEST Advisor College Savings Plan PIMCO 9.86 NE NEST Advisor College Savings Plan State Street Global Advisors 4.11 NE NEST Advisor College Savings Plan T. Rowe Price NE NEST Advisor College Savings Plan Tributary Funds NE NEST Advisor College Savings Plan Vanguard NE NEST Advisor College Savings Plan ishares 2.56 NE NEST Direct College Savings Plan Goldman Sachs NE NEST Direct College Savings Plan PIMCO NE NEST Direct College Savings Plan State Street Global Advisors 3.25 NE NEST Direct College Savings Plan T. Rowe Price 9.91 NE NEST Direct College Savings Plan Tributary Funds Exhibit 20 continues on the following page.

52 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 52 of 59 Exhibit 20 continued Allocation to Asset Manager by 529 Plan Data as of 2/28/13. Source: Morningstar, Inc. State Plan Name Firm Name Allocation NE NEST Direct College Savings Plan Vanguard NE NEST Direct College Savings Plan ishares 1.89 NY New York's 529 Program (Advisor-Guided) JPMorgan NY New York's 529 Program (Advisor-Guided) State Street Global Advisors NY New York's 529 Program (Direct) Vanguard ME NextGen College Investing Plan Direct BlackRock ME NextGen College Investing Plan Direct MFS 4.09 ME NextGen College Investing Plan Direct ishares ME NextGen College Investing Plan Select Allianz Funds 1.14 ME NextGen College Investing Plan Select BlackRock ME NextGen College Investing Plan Select Eaton Vance 0.19 ME NextGen College Investing Plan Select Franklin Templeton Investment Funds ME NextGen College Investing Plan Select MFS ME NextGen College Investing Plan Select MainStay 0.29 ME NextGen College Investing Plan Select PIMCO 0.98 ME NextGen College Investing Plan Select Thornburg 0.38 NJ NJBEST 529 College Savings Plan Franklin Templeton Investment Funds NJ NJBEST 529 College Savings Plan JPMorgan 2.95 OK Oklahoma College Savings Plan TIAA-CREF Mutual Funds OK OklahomaDream529 Allianz Funds OK OklahomaDream529 PIMCO OK OklahomaDream529 TIAA-CREF Mutual Funds OR Oregon College Savings Plan DoubleLine 0.38 OR Oregon College Savings Plan Dreyfus 0.20 OR Oregon College Savings Plan LSV Fund 1.46 OR Oregon College Savings Plan Northern Funds 2.12 OR Oregon College Savings Plan PIMCO 0.38 OR Oregon College Savings Plan T. Rowe Price 1.07 OR Oregon College Savings Plan TCM Funds 0.20 OR Oregon College Savings Plan TIAA-CREF Mutual Funds OR Oregon College Savings Plan Thornburg 0.24 OR Oregon College Savings Plan Vanguard GA Path2College 529 Plan TIAA-CREF Mutual Funds PA Pennsylvania 529 Investment Plan Vanguard NV Putnam 529 for America Federated 2.30 NV Putnam 529 for America Fidelity Investments 3.67 NV Putnam 529 for America MFS 4.48 NV Putnam 529 for America Principal Funds NV Putnam 529 for America Putnam NM Scholar'sEdge American Century Investments Exhibit 20 continues on the following page.

53 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 53 of 59 Exhibit 20 continued Allocation to Asset Manager by 529 Plan Data as of 2/28/13. Source: Morningstar, Inc. State Plan Name Firm Name Allocation NM Scholar'sEdge MainStay 8.39 NM Scholar'sEdge OppenheimerFunds NM Scholar'sEdge Thornburg 5.16 CO Scholars Choice College Savings Program Legg Mason CO Scholars Choice College Savings Program Royce 2.37 CO Scholars Choice College Savings Program Thornburg 9.32 CA ScholarShare College Savings Plan Dimensional Fund Advisors 4.36 CA ScholarShare College Savings Plan PIMCO 8.50 CA ScholarShare College Savings Plan T. Rowe Price 8.97 CA ScholarShare College Savings Plan TIAA-CREF Mutual Funds KS Schwab 529 College Savings Plan American Beacon 4.09 KS Schwab 529 College Savings Plan American Century Investments KS Schwab 529 College Savings Plan Baron Capital Group 4.06 KS Schwab 529 College Savings Plan Metropolitan West Funds 4.69 KS Schwab 529 College Savings Plan PIMCO 7.46 KS Schwab 529 College Savings Plan Schwab Funds WV SMART529 Select College Savings Plan Dimensional Fund Advisors WV SMART529 WV Direct College Savings Plan Hartford Life Insurance Company WV SMART529 WV Direct College Savings Plan Vanguard NE State Farm College Savings Plan OppenheimerFunds AK T. Rowe Price College Savings Plan T. Rowe Price NE TD Ameritrade 529 College Savings Plan American Century Investments 8.26 NE TD Ameritrade 529 College Savings Plan Goldman Sachs NE TD Ameritrade 529 College Savings Plan PIMCO NE TD Ameritrade 529 College Savings Plan State Street Global Advisors 3.00 NE TD Ameritrade 529 College Savings Plan T. Rowe Price NE TD Ameritrade 529 College Savings Plan Tributary Funds 4.65 NE TD Ameritrade 529 College Savings Plan Vanguard NE TD Ameritrade 529 College Savings Plan ishares 1.86 TX Texas College Savings Plan Dreyfus TX Texas College Savings Plan OppenheimerFunds TX Texas College Savings Plan TIAA-CREF Mutual Funds 9.33 TX Texas College Savings Plan Thornburg 5.77 TX Texas College Savings Plan Vanguard NM The Education Plan Dreyfus NM The Education Plan OppenheimerFunds NM The Education Plan TIAA-CREF Mutual Funds 7.25 NM The Education Plan Thornburg 2.01 NM The Education Plan Vanguard WV The Hartford SMART529 Hart Group, Ltd Exhibit 20 continues on the following page.

54 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 54 of 59 Exhibit 20 continued Allocation to Asset Manager by 529 Plan Data as of 2/28/13. Source: Morningstar, Inc. State Plan Name Firm Name Allocation WV The Hartford SMART529 Hartford Life Insurance Company WV The Hartford SMART529 Hartford Mutual Funds WV The Hartford SMART529 MFS 0.91 NV The Vanguard 529 College Savings Plan Vanguard MA U.Fund College Investing Plan Acadian Funds 0.01 MA U.Fund College Investing Plan Artisan 0.01 MA U.Fund College Investing Plan Aston 0.06 MA U.Fund College Investing Plan BlackRock 0.01 MA U.Fund College Investing Plan Causeway 0.02 MA U.Fund College Investing Plan Credit Suisse (New York, NY) 0.01 MA U.Fund College Investing Plan Eaton Vance 0.01 MA U.Fund College Investing Plan Fidelity Investments MA U.Fund College Investing Plan Harbor 0.02 MA U.Fund College Investing Plan Invesco 0.01 MA U.Fund College Investing Plan JPMorgan 0.06 MA U.Fund College Investing Plan Legg Mason 0.02 MA U.Fund College Investing Plan MFS 0.04 MA U.Fund College Investing Plan Natixis Funds 0.01 MA U.Fund College Investing Plan OppenheimerFunds 0.02 MA U.Fund College Investing Plan PIMCO 0.03 MA U.Fund College Investing Plan Royce 0.01 MA U.Fund College Investing Plan William Blair 0.02 NH UNIQUE College Investing Plan Acadian Funds 0.02 NH UNIQUE College Investing Plan Artisan 0.01 NH UNIQUE College Investing Plan Aston 0.09 NH UNIQUE College Investing Plan BlackRock 0.02 NH UNIQUE College Investing Plan Causeway 0.03 NH UNIQUE College Investing Plan Credit Suisse (New York, NY) 0.01 NH UNIQUE College Investing Plan Eaton Vance 0.02 NH UNIQUE College Investing Plan Fidelity Investments NH UNIQUE College Investing Plan Harbor 0.04 NH UNIQUE College Investing Plan Invesco 0.02 NH UNIQUE College Investing Plan JPMorgan 0.10 NH UNIQUE College Investing Plan Legg Mason 0.04 NH UNIQUE College Investing Plan MFS 0.07 NH UNIQUE College Investing Plan Natixis Funds 0.01 NH UNIQUE College Investing Plan OppenheimerFunds 0.04 NH UNIQUE College Investing Plan PIMCO 0.05 NH UNIQUE College Investing Plan Royce 0.01 NH UNIQUE College Investing Plan William Blair 0.04 Exhibit 20 continues on the following page.

55 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 55 of 59 Exhibit 20 continued Allocation to Asset Manager by 529 Plan Data as of 2/28/13. Source: Morningstar, Inc. State Plan Name Firm Name Allocation AK University of Alaska Coll Savings Plan T. Rowe Price NV USAA College Savings Plan USAA UT Utah Educational Savings Plan Vanguard VT Vermont Higher Education Investment Plan TIAA-CREF Mutual Funds VA Virginia529 invest NA 3.70 VA Virginia529 invest Aberdeen 6.08 VA Virginia529 invest American Funds 5.51 VA Virginia529 invest Franklin Templeton Investment Funds 5.51 VA Virginia529 invest Morgan Stanley 6.27 VA Virginia529 invest Parnassus 0.36 VA Virginia529 invest Stone Harbor 7.61 VA Virginia529 invest Vanguard 64.96

56 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 56 of 59 Morningstar Analyst Ratings for 529 College-Savings Plans Morningstar has conducted qualitative, analyst-driven research on 529 college-savings plans since 2004 and has transitioned to a new ratings scale. The Morningstar Analyst Rating for 529 College-Savings Plans is the summary expression of our forward-looking analysis of a 529 collegesavings plan. Analyst Ratings are assigned on a five-tier scale running from Gold to Negative. The top three ratings, Gold, Silver, and Bronze, all indicate that our analysts think highly of a 529 plan; the difference corresponds to the level of analyst conviction in a plan s investment options ability to collectively outperform their respective benchmarks and peers through time, within the context of the level of risk taken. The Analyst Rating seeks to evaluate each plan s investment options within the context of their objectives, appropriate benchmarks, and peer groups. In 2012, Morningstar evaluated 529 plans in five different areas Process, Performance, Price, Parent, and People to assign an Analyst Rating for more than plans. Gold These plans are our highest-conviction recommendations and stand out as best of breed for their ability to help college savers meet their goals. By giving a plan a Gold rating, we are expressing an expectation that its investment options collectively will outperform their relevant performance benchmarks and/or peer groups within the context of the level of risk taken over the long term (defined as a full market cycle or at least five years). These plans are good choices for investors who live in the states where the plans are based, and they re also good options for investors doing a nationwide search. Silver Plans that fall in this category have high-conviction recommendations. They have notable advantages across several, but perhaps not all, of the five pillars. With those fundamental strengths, we expect these plans investment options will outperform their relevant performance benchmarks and/ or peer groups within the context of the level of risk taken over the long term (defined as a full market cycle or at least five years). While these are worthy plans with many positive features, they are not the highest-conviction recommendations. These plans are very strong choices for in-state residents, and in some cases they may be worthy of consideration by nonresidents. Bronze These plans have advantages that clearly outweigh any disadvantages across the pillars, giving us the conviction to award them a recommended rating. As is the case with any plan receiving a Medal, we expect the plans investment options to beat their relevant performance benchmarks and/ or peer groups within the context of the level of risk taken over the long term (defined as a full

57 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 57 of 59 market cycle or at least five years). Like Silver-rated plans, these plans are a fine choice for in-state residents. Neutral These are plans in which we don t have a strong positive or negative conviction. In our judgment, these plans investment options aren t likely to deliver standout returns, but they aren t likely to seriously underperform their relevant performance benchmark and/or peer group either. A promising but unproven plan may also receive this rating until we see further evidence that its investment options have the potential to outperform. Neutral-rated plans are perfectly serviceable choices for in-state residents and may even be the best choice after accounting for in-state tax benefits. Negative These plans possess at least one flaw that we believe is likely to significantly hamper future performance, such as high fees or an unstable management team. Because of these faults, we believe these plans investment options are inferior to most competitors and will likely under-perform their relevant performance benchmarks and/or peer groups within the context of the level of risk taken over the long term (defined as a full market cycle or at least five years). If a state s 529 plan earns a Negative rating, investors are probably better off leaving their home state s plan and going with a Gold- or Silver-rated option.

58 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 58 of 59 Exhibit 21 Morningstar Analyst Rating for 529 College-Savings Plans Data as of 2/28/13. Source: Morningstar, Inc. State Plan Name Morningstar Analyst Rating Sales Channel MD Maryland College Investment Plan Œ Direct AK T. Rowe Price College Savings Plan Œ Direct NV The Vanguard 529 College Savings Plan Œ Direct UT Utah Educational Savings Plan Œ Direct OH CollegeAdvantage 529 Savings Plan Direct VA CollegeAmerica Advisor AR ishares 529 Plan Advisor MI Michigan Education Savings Program Direct IL Bright Directions Coll Savings Program Advisor IL Bright Start College Savings (Direct) Direct IA College Savings Iowa 529 Plan Direct IN CollegeChoice 529 Direct Savings Plan Direct IN CollegeChoice Advisor 529 Savings Plan Advisor AL CollegeCounts 529 Fund Direct CO CollegeInvest Direct Portfolio Direct CT Connecticut Higher Education Trust Direct SC Future Scholar 529 (Advisor) Advisor SC Future Scholar 529 (Direct) Direct KS LearningQuest 529 Program (Direct) Direct OR MFS 529 Savings Plan Advisor NC National College Savings Program Direct NY New York's 529 Program (Direct) Direct GA Path2College 529 Plan Direct CO Scholars Choice College Savings Program Advisor CA ScholarShare College Savings Plan Direct NV USAA College Savings Plan Direct VA Virginia529 invest Direct OH BlackRock CollegeAdvantage 529 Plan ˇ Advisor IL Bright Start Coll Savings (Advisor) ˇ Advisor ND College SAVE ˇ Direct SD CollegeAccess 529 ˇ Advisor and Direct AL CollegeCounts 529 Fund Advisor Plan ˇ Advisor DE Delaware College Investment Plan ˇ Direct WI EdVest 529 Plan ˇ Direct NH Fidelity Advisor 529 Plan ˇ Advisor AZ Fidelity Arizona College Savings Plan ˇ Direct NJ Franklin Templeton 529 Coll Savings Plan ˇ Advisor AR GIFT College Investing Plan ˇ Direct ID IDeal - Idaho College Savings Program ˇ Direct AZ Ivy Funds InvestEd 529 Plan ˇ Advisor Exhibit 21 continues on the following page.

59 Morningstar Fund Research College-Savings Plans Industry Survey updated 25 April 2013 Page 59 of 59 Exhibit 21 continued Morningstar Analyst Rating for 529 College-Savings Plans Data as of 2/28/13. Source: Morningstar, Inc. State Plan Name Morningstar Analyst Rating Sales Channel AK John Hancock Freedom 529 ˇ Advisor MO MOST Missouri's 529 Plan ˇ Direct NE NEST Advisor College Savings Plan ˇ Advisor NE NEST Direct College Savings Plan ˇ Direct NY New York's 529 Program (Advisor-Guided) ˇ Advisor ME NextGen College Investing Plan Direct ˇ Direct ME NextGen College Investing Plan Select ˇ Advisor NJ NJBEST 529 College Savings Plan ˇ Direct OK Oklahoma College Savings Plan ˇ Direct OR Oregon College Savings Plan ˇ Direct PA Pennsylvania 529 Investment Plan ˇ Direct NV Putnam 529 for America ˇ Advisor NM Scholar'sEdge ˇ Advisor NV SSgA Upromise 529 Plan ˇ Direct NE TD Ameritrade 529 College Savings Plan ˇ Direct WV The Hartford SMART529 ˇ Advisor WI Tomorrow's Scholar 529 Plan ˇ Advisor MA U.Fund College Investing Plan ˇ Direct NH UNIQUE College Investing Plan ˇ Direct VT Vermont Higher Education Investment Plan ˇ Direct RI CollegeBoundfund Advisor RI CollegeBoundfund Direct Direct MN Minnesota College Savings Plan Direct KS Schwab 529 College Savings Plan Direct