Stable value funds continue to be a viable target for many state's 529 college savings plans, according to a recently release white paper from Prudential Financial, Inc.

In its recently published white paper, "529 Plans: Assessing the Stable Value Option," Prudential explains why the funds, which it describes as "investment vehicles wrapped in insurance contracts that guarantee a specific minimum return," are becoming so popular. 

"The growing interest in stable value may be explained by the fact that some administrators of 529 plans are familiar with its use in state-sponsored 403(b) and 457 retirement savings plans," Prudential states in an article outlining its white paper. 

According to the Prudential article, college savings plans in 26 states now include a stable value fund. 

"With their relatively short investment horizons, many participants in 529 plans place a premium on protecting their principal," the Principal article states. "At the same time, they appreciate seeing their account grow in value."

The article goes on to explain that with 529 plans becoming popular, plan administrators adding a stable value option can be very beneficial, especially since the new tax cut legislation has expanded 529 plans to include K-12 expenses.

"With that change, some parents may find themselves tapping their 529 assets sooner than anticipated," the article states. "If so, their keen focus on principal guarantees — and the appeal of stable value funds — may only be heightened."