Changes this week to a state plan that helps parents save for their children’s college education will give participants more investment choices and lower fees, Missouri Treasurer Sarah Steelman said.

"I want every child in our state to be able to go to college," Steelman said in a prepared statement. "With three children of my own, I know how challenging it can be for families to save for college."

The Missouri Saving for Tuition, or MOST, program is a so-called 529 plan, named for a part of the federal income tax code designed to encourage savings for higher education. Under the program, which began in 1999, individual Missourians can deduct up to $8,000 per year on their state income tax return for contributions to college savings accounts. Earnings in the accounts are exempt from federal and state income tax.

Beginning this week, the state replaced New York-based TIAA-CREF with Needham, Mass.-based Upromise Inc. as the MOST program manager. With Upromise, direct savers can choose from 15 funds managed by Vanguard Investments and American Century. There also are three "age-based" fund choices from Vanguard that balance risk and return factors depending upon the age of the future college student. Previously, savers had just one age-based option and two other fund choices.

Annual investment fees also are lower, Steelman said in a news release. The annual fee on a Vanguard index fund, for example, is 0.62 percent.

MOST participants also can work with personal financial advisers under a separate plan that typically charges higher fees but offers more fund options.

Terry Seboldt, senior vice-president and head of investments and retirement planning for The Bank of Missouri, said expanding the investment options was important.

"Any time you diversify beyond a single manager you should be able to build a stronger and more diversified portfolio," he said. "Adding funds allows you to build a portfolio that may have the best performing fund in each category."

Saving for a college education is like a second mortgage payment for many families as costs for higher education continue to skyrocket. Tuition and housing costs alone next year at the University of Missouri-Columbia are expected to run $14,308. Total costs, including books, supplies and other expenses could run $18,030, according to MU’s financial aid Web site. Tuition and housing costs at Stephens College are slated to rise 5.7 percent next year to $28,474.

Mark Richardson, a senior client adviser with The Bank of Missouri, said that in 2024 it could cost about $224,000 to fund a four-year college degree, assuming costs continue to increase at the current annual rate of about 6 percent.

A $46,000 gift today could hit that target if investments earn at least 8 percent per year, Richardson said. Alternatively, monthly installments of $363 for 22 years - a total of $95,832 - will reach the same target.

"These numbers are pretty scary," Richardson said. "We make sure our clients are aware of the different options that are out there."

But he said with government loans and other aid programs, grants and scholarships, that much money might not be necessary. "It’s not like it’s $363 a month or nothing," he said.

Richardson said financial planners interview clients and help them start a savings plan that is realistic in terms of the future need and current family budget. But people should start now, he said.

"Many people delay a savings program," he said. "The earlier the better so that the time value of money is on your side."