Vanguard is embellishing its 529 program with the state of Iowa by letting savers direct their investments under the program. Up until now, the Iowa Treasurer had been responsible for investing the program's assets. The office has used Vanguard investment options since the program was launched in 1998.

The newly revamped plan will offer four investment tracks with five portfolios each. Each of the options is tailored to a child of a different age and will be managed by the State Treasurer's office.

Each of the four tracks offers a different risk level in its asset allocation. Each of the tracks also gradually dials down the risk in its allocation over the course of five portfolios. Thus, investors under five years old are placed in the "Aggressive Growth Portfolio." How aggressive that portfolio is differs by track. By the time the beneficiary reaches 19 years old, he or she is placed in the "Income Portfolio."

Vanguard will begin to provide administration and marketing for the plan. The plan Web site is located at www.collegesavingsiowa.com.

"Our newly expanded relationship with Vanguard represents an exciting opportunity in helping today's families to meet the rising cost of college education," said State Treasurer Michael L. Fitzgerald. "College Savings Iowa provides an affordable, flexible, and tax-advantaged way for families to save."  

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