On November 10, 2025, Morningstar released the 2025 Ratings for 59 College Savings Plans, including 59 Direct-sold Plans and 20 Advisor-sold Plans. The much anticipated release resulted from months of extensive work on behalf of both the States, their Plan Administrators, and the Morningstar Manager Research Team. The 2025 process saw minor shifts compared to 2024, with the same 59 Plans being rated in both years. The number of Medalist Plans (earning Gold, Silver and Bronze) decreased from 32 in 2024 to 31 in 2025, but the top performers remained largely the same, with the five Direct-sold Plans earning Gold ratings across both years, and two Advisor-sold Plans retaining Silver ratings across both years, suggesting durable strength at the top. Notably, we observed fewer rating changes in 2025 compared to 2024, signaling consistency in the approach to the overall ratings and – in our view – confirmation that Morningstar stands behind the major process changes it implemented in 2024.
What Stayed the Same?
Morningstar’s approach to ratings continues to be based on the methodology introduced in 2024. To recap, the framework puts greater weight on Process and Parent Pillars, which means a Plan’s investment design and State oversight matter more than in the past. And the reconfiguration of the Price component – from a dedicated (30%) Pillar to a mathematical equation – reflects Morningstar’s view of how much “extra” return a Plan generates beyond fundamentals. We note that this practice now aligns with Morningstar’s evaluation of mutual funds.
For us, fewer Plan rating changes in 2025 indicate Morningstar’s affirmation of the methodology it implemented in 2024. Last year, we observed sweeping rating changes, reflecting the Pillar weighting changes with calculated Price Adjustment, which together resulted in 11 upgrades and nine downgrades in overall Plan ratings. This year, the changes – one upgrade and four downgrades – feel more like fine-tuned adjustments, particularly at the Medalist level.
In particular, we note stability across Process and People ratings this year. In 2024, 17 Plans received a rating change in one of these two Pillars. By contrast, this year, only three Plans did, and all in the Process Pillar. This also means no Plan saw a change in the People Pillar rating. It seems that Morningstar’s view of the investment teams and their strategies generally remained unchanged in 2025.
So What Changed?
Our reading of the Analyst Reports suggests that the Parent was a key focus for Morningstar in 2025, with significant movement across Plans. In fact, 12 Plans received a Parent Pillar rating change this year as compared to just eight Plans in 2024. The good news is that the change this year represents mostly upgrades, with some changes pushing Plans up a notch in the ratings. Key takeaway for States is that the Parent Pillar has greater room for upward mobility than perhaps other Pillars, and it should continue to be a focus point.
Though not an explicit Pillar, the Price Adjustment is a hidden wild card that is scored on a curve – based on the industry median and standard deviation of average fees across the industry. This year, the industry median came down by 3 basis points (0.43% in 2024 versus 0.40% this year) and the standard deviation was also reduced by 1 basis point (0.38% in 2024 versus 0.37% this year). The industry continues to reduce fees each year, putting pressure on Plans to stay ahead. Most rated Plans experienced slight Price Adjustments this year, but even small changes can be critical if the overall Plan score is on the border of two rating categories. In fact, two Plans that did not “keep up” on Price received an overall rating downgrade this year.
What Matters for 2026?
The perceived significance of overall Plan ratings differs across the industry, often driven by the distribution channel (e.g., Direct versus Advisor). For State and Plan Administrators that value the ratings, the stakes have increased as Morningstar’s view of Plans seems to have settled for the most part. Nonetheless, we believe there are important insights to draw from 2025 for the future, and it starts with having a good grasp of Morningstar’s rating methodology, which drives overall Plan ratings.
As we shared above, we believe the Parent Pillar appears to have the most room for improvement. For States, it will be critical to demonstrate a stable, capable and committed oversight team. That said, since Pillar ratings differ across Plans, we like to believe that each Pillar offers an opportunity for improvement: a slight change to an investment strategy could have an outsized impact on Process, while emphasizing a proven team can improve People.
In 2025, Morningstar showed conviction in its methodology; we view 2026 as yet another test of the process. Contact us if you would like to talk about your Plan ratings or the 2025 season and how you can best prepare for 2026.