Kentucky Families Encouraged to Invest Tax Refund in Their Children's Future

Open a Kentucky College Savings Account for the Child in Your Life

FRANKFORT, Ky., March 30 /PRNewswire/ -- Parents and grandparents who wish to save for their children's college education are encouraged to invest this year's tax refund in a Kentucky Education Savings Plan Trust (KESPT) account, Kentucky's state-sponsored 529 college savings plan.

"Opening a KESPT account and making regular contributions is one of the most important investments that parents and grandparents can make," said Dr. Joe L. McCormick, Executive Director of the Kentucky Higher Education Assistance Authority (KHEAA). "Using the tax refund is a tremendous opportunity for families to make an investment in a child's education and future!"

KESPT is a state-sponsored, tax-advantaged 529 college savings plan administered by KHEAA. The plan was created by the 1988 Kentucky General Assembly to help families save for their children's higher education. An account can be used to pay any qualified higher education expense, including tuition, fees, supplies, books, and equipment required for enrollment and some room and board costs. KESPT is managed by TIAA-CREF, a national financial services organization.

Last year was a tremendous year for the plan, with assets soaring to just under $60 million -- an increase of 32 percent over the previous year. The average account balance also grew substantially over the past year and now exceeds $7,100; the total number of KESPT accounts swelled to over 8,300 -- up 11 percent.

Popular plan features include:
* Federal and Kentucky state income tax advantages -- Contributions to a
KESPT account grow free from federal and Kentucky income taxes.

* Tax-free withdrawals -- Withdrawals used for qualified expenses,
including tuition, room and board, are free of both federal and
Kentucky income taxes.

* Flexibility -- The ability to use funds at any of Kentucky's higher
education institutions and at colleges throughout the United States.

* Low expenses -- An annual asset-based management fee of 0.80% is used
to cover the cost of investment management and administrative services.

* Investment options -- KESPT offers three investment choices: Managed
Allocation Option, 100% Equity Option, and a Guaranteed Option.

* There are no income or residency restrictions on who can open an
account.

"As higher education costs continue to rise, it is increasingly important that Kentucky families start saving by opening a KESPT account," said Sherry Thomas Palmer of TIAA-CREF Tuition Financing Inc., Program Manager for KESPT. "By starting to save for college early, families can take advantage of the compounding effect of time on their investment, while at the same time benefiting from federal and Kentucky tax-free growth."

"Features like access through employers, online enrollment, and online account access have added to the program's popularity," added Palmer.

KHEAA is the state agency that administers grants, scholarships, work- study and low-cost loan programs to help Kentuckians pay college expenses.

KESPT's website http://www.kysaves.com/ provides complete information and online enrollment. Information and applications can also be obtained through the customer service center, toll free at 1 877 KY TRUST (1 877 598-7878).