In a news release issued today, State Treasurer Clint Zweifel explained the new college savings program:

State Treasurer Clint Zweifel (ZWY-ful) visited the University of Missouri-Kansas City today to announce Missouri’s college savings plan is now the 5th lowest cost in the nation. A new five-year management agreement with Upromise Investments slashes costs of the do-it-yourself MOST 529 Plan by 44 percent. The announcement also included a $500,000 financial assistance package.

Standing with UMKC Chancellor Leo Morton, Vice Chancellor Mel Tyler, students and Upromise and Vanguard representatives, Treasurer Zweifel said the public-private partnership is estimated to save investors $18.5 million.

“This is the largest cost reduction in history and guarantees every single Missourian substantial savings with this elite plan. College saving is up 50 percent since I took office – Missourians expect lower costs because of this commitment,” Treasurer Zweifel said. “This announcement makes the best choices at the best prices available to all Missourians. Lower costs and only $25 to open an account increases access to affordable higher education – whether a four-year, two-year or technical school. Missourians will save millions of dollars and Upromise is showing its commitment to our state.”

Upromise’s presence in the state includes a downtown Kansas City office, which opened in June. The office employs 35 people and is expected to grow to 80 financial services jobs by mid-2011.

The 44 percent price cut is effective June 6 and is on the heels of a 10 percent cost reduction in July. Currently, 113,000 account owners have invested $1.47 billion with the direct-sold MOST 529 Plan.

The direct-sold MOST 529 Plan features low-cost Vanguard investments, including three age-based options, 10 index-based portfolios and four actively managed portfolios. Costs will range from 0.29 percent to 0.38 percent for age-based and index-based options, previously 0.55 percent. Actively managed portfolios will range 0.53 percent to 0.60 percent; previously ranging 0.87 percent to 1.58 percent. The total asset weighted cost of the direct-sold plan is now 0.32 percent – fifth lowest in the nation.

Treasurer Zweifel also announced a new five-year $500,000 financial assistance package for Missourians saving for college with MOST 529. Details will be announced later.

“I combined savings, scholarships and part-time jobs to be the first in my family to graduate from college,” Treasurer Zweifel said. “Missouri families are steadfast college savers and I want to reward that commitment. It is a commitment to save early, often and at historic all-time highs.”

Missourians preferring to save through a financial advisor now have expanded world-class options through DWS Investments, the world’s eighth largest mutual fund company. The advisor-sold MOST 529 Plan will be distributed solely through DWS Distributors, while continuing to provide access to other investments including American Century, American Funds, BlackRock, Columbia, Franklin Templeton, Invesco, PIMCO and T. Rowe Price. Investors will continue to have access to the Scout International Terror-Free portfolio from UMB Bank. The advisor-sold plan has 13,500 accounts with more than $133 million. No account owner will see a fee increase and 27 percent will see fees decrease.

“This public-private partnership with DWS is another sign that in the global economy, Missourians are gaining greater access to global economic leaders based both in the Show-Me State and throughout the world,” Treasurer Zweifel said.

“We are proud to continue our partnership with Treasurer Zweifel and MOST 529,” said Jeff Howkins, president of Upromise. “We are committed to helping Missouri families save more for higher education with enhanced features: low-cost investments from Vanguard, a new suite of advisor-sold investments distributed and marketed through DWS and popular Ugift and Upromise rewards services.”

As a result of changes to some of the underlying funds in the direct and advisor-sold MOST 529 Plans, some account owners will be directed into new portfolios unless they choose on their own in advance. Owners will receive formal communication in advance of June.