Alaska's college savings program: a jewel in the crown of the University of Alaska.

• Author: Lynch, James F.
• Position: EDUCATION

The opinions expressed herein are those of the authors alone and not of the University of Alaska.

"The mind that has conceived a plan of living must never lose sight of the chaos against which that pattern was conceived."--Ralph Ellison

A $5 billion plus college savings program portfolio giving one of the best long-term performances in the nation resides in the University of Alaska (UA). What manner of program is this? How did it come about?

The story of the genesis and success of the college savings program at UA has an uncommon arc with bold intentions, happenstance, and social forces all playing a role in resolving how far we have come. It magnifies the range of good public policy possibility on display. The story is fascinating like dancing on thresholds moving to a realm of punk good. The sweep, trajectory, and extraordinary reach of this transformational program make it a veritable jewel for UA. Here is a shower of rain where every drop has caught a gleam.

Education Trust of Alaska

Few people are aware that UA houses one of the largest college savings programs in the country, the Education Trust of Alaska. According to the Morning-star 2013 529 College Savings Plans Industry survey, at approximately $5 billion, it ranked eighth of forty-seven state college savings programs offered as of December 31, 2012, and houses what is generally recognized as one of the top college savings plans in the country. UA partnered with T. Rowe Price to develop a plan which is marketed nationally under the T. Rowe Price College Savings Plan name. This plan has gained national recognition as one of the best in the country based on a number of factors, including long-term performance, cost, customer service, and governance. The T. Rowe Price College Savings Plan has consistently been ranked by Morningstar as one of the top five plans in the country and was recently reported by Morningstar to be one of the top three plans based on risk adjusted returns. In 2012, it was one of only four college savings plans in the nation to receive Morningstar's Gold rating.

A version of the T. Rowe Price plan is marketed in Alaska as The University of Alaska College Savings Plan. It offers the same investment options as the T. Rowe Price College Savings Plan plus a very low cost option that includes a Tuition-Value Guarantee: a guarantee that the earnings will keep pace with tuition inflation if used for tuition at UA. Effectively, a participant can purchase tuition credits at today's prices and redeem those credits anytime in the future at the then current upper division tuition rate for tuition at any UA campus. If the earnings...