Molly Duffy’s Jan. 14 “Expanding tax-free tuition carries big price” on the expansion of 529 benefits to K-12 private education misses a larger issue that costs Iowa participants in these accounts millions each year.
State Treasurer Michael Fitzgerald charges 529 participants an administrative fee of .20 percent on invested assets. This administrative fee is in addition to the fees the investment company charges for their services.
Fitzgerald reports that Iowan’s have invested over $5 billion in these accounts. Fitzgerald’s administrative fees, using his numbers, divert $10 million a year from citizen’s college savings accounts to his office.
Fitzgerald needs to stop taking money from citizen’s 529 investment accounts and allow participants to use these dollars for their intended purpose — college savings.