Ohio's CollegeAdvantage 529 Plan Reports Strong Growth in 2007

Lower investment fees start February 1

COLUMBUS, Ohio, Jan. 30 /PRNewswire-USNewswire/ -- The Ohio Tuition Trust Authority is reporting another significant increase in participation in the CollegeAdvantage 529 Savings Plan during 2007 by Ohioans. Over the past year, nearly 42,000 new CollegeAdvantage accounts were opened by Ohio families with contributions totaling over $617 million. New accounts increased 16.3% over 2006 and contributions increased 32.4%. Plan assets in Ohio increased 14% from $2.6 billion in 2006 to just over $3 billion in 2007. Over 319,000 Ohio beneficiaries are enrolled in CollegeAdvantage. CollegeAdvantage is also offered nationally with total plan assets in Ohio and across the country at $6.3 billion.

"The continued strong growth in participation and contributions is a trend not only in Ohio, but also in 529 plans across the county. The growth in 529 plans can be attributed to passage of the 2006 Pension Protection Act which made the federal tax exemption on earnings permanent when funds are used for qualified college expenses. In addition, increased awareness of 529 plans and market acceptance of 529 plans being the preferred way to save for college contribute to the on going growth," said Jackie Williams, Tuition Trust Executive Director.

Program growth allows for the Tuition Trust to pass on additional savings to CollegeAdvantage direct-sold account owners by way of lower annual asset-based fees for those participating in the investment options managed by The Vanguard Group and Putnam Investments. Starting February 1, total administrative fees for the Vanguard funds will decrease by 0.02% and by 0.05% for the direct-sold Putnam funds. Additionally, the fee structure for the three age-based investment options managed by Putnam will change from a flat annual rate of 0.89% to a tiered annual rate based on the age of the child. This change will result in fee decreases of up to 0.30% depending on the age of the child and choice of Putnam age-base options. Total asset-based fees for the CollegeAdvantage investment options start as low as 0.21%. There are no fees for the Fifth Third Savings accounts and CDs.

"The CollegeAdvantage direct-sold plan already offers some of the lowest fees in the country for 529 plans and now, with even lower fees, can provide enhanced value to current and prospective account owners. Lower fees help account values to grow faster which help families reach their college savings goals," said Williams.

Ohio's plan is one of the largest plans in the country and offers a diverse choice of investments options through leading financial institutions such as Vanguard, Putnam and Fifth Third Bank. The state of Ohio tax deduction continues to provide a key incentive for Ohio families to participate. Ohioans who enroll in and contribute to CollegeAdvantage can take advantage of a $2,000 annual state of Ohio income tax deduction. Any Ohio taxpayer who contributes to a College Advantage 529 account can claim the deduction including grandparents, other relatives or family friends. Up to $2,000 per contributor (or married couple) can be deducted annually for each child. Contributions over $2,000 per child can be deducted in future years.

Funds in CollegeAdvantage can be used at any college in the country to pay for tuition, fees, books and room and board. Contributions as low as $15 can be made online, through payroll deduction, electronic fund transfers or through convenient contribution slips. Families can open a CollegeAdvantage account by completing an account application online at http://www.collegeadvantage.com or by calling 1-800-AFFORD-IT (233-6734) and requesting an enrollment kit. The Putnam options are also available through financial advisors.

The Ohio Tuition Trust Authority is a state agency created by the Ohio General Assembly in 1989 to help Ohio families prepare financially for higher education. The Tuition Trust offers the CollegeAdvantage 529 Savings Plan to provide families with a tax-advantaged way to save for college. To learn more about CollegeAdvantage, call 1-800-AFFORD-IT (233-6734), or log on at http://www.collegeadvantage.com/.