1. College Savings Plan

2. Who is CollegeInvest?
Not-for-profit higher education financing resource
Division of the Colorado Department of Higher Education
1979

3. What Do We Offer? College Savings Plans Community Outreach
Scholarships

4. www.educationcents.org This is the website for Education Cents.
You can use the tools on the website without signing in but there is a reward for you if you do. (Point out sign-in/register now location on the website.)
If you register, you earn “reward points,” which can be used to enter a drawing for scholarships. More information about this will be included at the end of the presentation.
Let’s get started exploring saving and investing…

5. Importance of Higher Education
By 2018, 67 % of all jobs in Colorado will require post- secondary education.
Over the course of a lifetime, the earnings difference between a high school diploma and a bachelor’s degree is over a million dollars.
Currently, 86% of jobs in the job market require at least a two-year degree.
Source: Center on Education and the Workforce, Georgetown University

6. Projected Cost of College
Cost of four years of college
Today Public $74,842 Private $171,526
In 5 years Public $94,488 Private $216,547
In 10 years Public $126,445 Private $289,789
The economic reality is that parents cannot count on college loans and grants being available or affordable when their children reach college age.
- Kevin McMullen, Chairman of the College Savings Foundation
Source: College Board’s “20010 Trends in College Pricing.” Based on a hypothetical 6% inflation rate. Figures are based on an estimated average of current student expenses including tuition, fees, room and board only.

7. Importance of Saving for College
It is never too late to start saving
Saving at any age gives you the stepping stones toward your goal
Every little bit helps!
Every dollar adds up
Think about transitioning budget dollars as they are no longer needed.
For example: As your child outgrows diapers, use the money spent monthly on diapers to fund a 529 savings plan

8. Importance of Saving for College
Monthly Investment Needed to Save for College Based on Years Until Investments are Needed
The sooner you start saving, the less you have to save.
Scenario:
Newborn child
Current average cost for one year at a Public College - $16,140
College in 18 years
Projected cost - $201,533
If you were to pay for the entire cost of a four year public college education in 18 years, you could expect the cost to be approximately $175,695 for four years. You may not need to pay for all of the expenses and you may use other sources of funding that we will discuss later. But for example purposes, and to demonstrate the benefit of starting early, lets look at this example.
Your child is born this year, and will be attending college in 18 years. If you started saving today, at $408 per month, and achieve a 5% annual rate of return, you would have enough to pay the $175,695. This is how this hypothetical pre-tax 5% return vs. what you need to invest works. Now if you waited 8 years and reduced the time until you need the investments to 10 years, you would need to invest $802 per month. Finally, if you waited 13 years, or until you need the investments in 5 years, you would need to invest $1,426 per month.
This example is not intended to scare you, but rather to get you thinking about starting now, rather than later.
Let’s focus on how to pay for college.
Source: College Board’s “2010Trends in College Pricing.” Figures are based on an estimated average of current student expenses including tuition, fees, room and board only. This hypothetical illustration represents the effects of compounding assets monthly assuming an annual pre-tax rate of return of 5% and inflation of 6%. It does not reflect an actual investment or any taxes payable upon withdrawal. A periodic investment does not assure a profit or protect against a loss in declining markets.

9. College Savings Vehicles

10. College Saving Options
Uniform Trust/Gift to Minors Act Account (UTMA/UGMA)
Coverdell Educations Savings Account
Roth IRA
U.S. Savings Bonds
Taxable Accounts
529 College Savings Plans

11. Advantages of a 529 College Savings Plan
Money can be used at any qualified higher education institution nationwide
Savings grow tax-deferred
Tax-free qualified withdrawals(1)
Beneficiary can be changed at any time(2)
No restriction on who can contribute
Professional money managers focused on the market
Money can be used for tuition, fees, certain room and board, books and required supplies and equipment.
State Tax deductions and other benefits vary by each state
(1) The earnings portion of a non-qualified withdrawal is subject to federal income taxes and any applicable state income tax, as well as an additional 10% federal tax penalty.
(2) Restrictions apply. See Program Disclosure Statement for details.

12. 529 College Savings Plan Account Limits
Contributions in Colorado can be made until account value is greater than $280,000 per beneficiary
Maximum contributions without incurring gift taxes
Up to $65,000 for a single person or $130,000 per couple
Counts as a prorated $13,000 gift for 5 years*
* For contributions between $13,000 and $65,000 made in one year, if the account owner dies before the end of the 5-year period, a prorated portion of the contribution will be included in his or her taxable estate.

13. The CollegeInvest Advantage

14. The CollegeInvest Advantage
Dollar-for-dollar Colorado State income tax deduction for contributions
Non-CollegeInvest Savings
Federal AGI $65,000
State Tax Rate %
State Taxes $ 3,010
CollegeInvest Savings
Federal AGI $65,000
CI Deduction ($5,000)
Adjusted AGI $60,000
State Tax Rate x 4.63%
State Taxes $ 2,778
Tax Savings $
This is hypothetical example is for illustrative purposes only. Consult with your tax advisor in light of your specific situation.
* Contributions to the Plan(s) are deductible from Colorado State income tax in the tax year of the contribution, up to your Colorado taxable income for that year. Such deductions are subject to recapture in subsequent years in which non-qualified withdrawals are made.

15. CollegeInvest Options
Four distinct 529 college savings plans to help meet your needs
Direct Portfolio
Scholars Choice
Smart Choice
Stable Value Plus

16. Direct Portfolio
4 ½ cap rating for Colorado residents by Joe Hurley of Savingforcollege.com*
Eleven investment options
Three age-based options
Eight blended and individual portfolio options
* Savingforcollege.com: As of June, The “5-Cap Ratings” represent the overall usefulness of a state’s 529 plan based on many factors i.e., high contribution maximums and low minimums, wide eligibility standards and ability to use account for all qualified higher education expenses. The 4 ½ cap rating is considered an excellent program with many benefits for the participant and positive investment attributes. Please note that our 5 cap ratings can change at any time and without warning.

17. Direct Portfolio
Age-Based Options

18. Blended & Individual Portfolios
Direct Portfolio
Blended & Individual Portfolios

19. Scholars Choice®
4 ½ cap rating for Colorado residents by Joe Hurley of Savingforcollege.com*
Available exclusively through financial advisors
Automatic Allocation Options
Age-Based & Years to Enrollment
Selected Allocation Options
* Savingforcollege.com: Source as of 4/09/10. The “5-Cap Ratings” represent the overall usefulness of a state’s 529 plan based on many factors, e.g., high contribution maximums and low minimums, wide eligibility standards and ability to use account for all qualified higher education expenses. The 4.5 cap rating for in-state Colorado residents is considered an excellent program with many benefits for the participant and positive investment attributes. If it has any significant weaknesses then it also has some particularly good things to recommend it. Please note that our 5 cap ratings can change at any time and without warning.

20. Automatic Allocations
Scholars Choice
Automatic Allocations
More
Conservative
Aggressive
Selected Allocations
More
Conservative
Aggressive

21. Smart Choice Only FDIC-insured Savings Plan offered by CollegeInvest
Two Savings Options:
The CollegeInvest Smart Choice College Savings Plan is not insured by CollegeInvest, the State of Colorado, or their agencies. However, these funds are FDIC insured in accordance with the current FDIC coverage limits. FirstBank – Member FDIC

22. Stable Value Plus Protect the principal investment
Provides a minimum rate of return of 2% (before fees)
Return is currently 2.9%
Provide earnings that could be greater than the minimum
Reset every December for the next calendar year

23. Choosing the Right CollegeInvest Plan
Getting started…
What is your savings goals?
What is your time horizon?
How much are you willing to save?
What is your risk tolerance?

24. Planning for College Before college: Saving for college
Be academically prepared
Research and compare schools
Apply for College Opportunity Fund
Search for scholarships
Build a resume of activities and community service
Start looking for scholarships your junior year or by fall of your senior year

25. College
Savings Tips

26. Matching Grant Program
You invest a dollar. We’ll invest a dollar.
Designed to help lower to middle income Colorado residents save*
Contributions may be matched dollar for dollar, up to $500 per year (for a total of 5 years)
Beneficiary must be under the age of twelve
Account owner must be able to claim beneficiary as a dependent
Detailed program description
Qualifications & Restrictions
Application

27. Additional Ways to Save Through Direct Portfolio
Accelerate your savings with Upromise® Service
Cash Back Rebate program linked directly to a CollegeInvest Direct Portfolio 529 account; 600+ Online Stores, 8,000+ Restaurants, 21,000+ Grocery & Drug Stores
Invite family and friends to help you save with UgiftSM
Upromise and the Upromise logo are registered trademarks of Upromise, Inc. Ugift is a registered service mark of Upromise, Inc. © 2008 Upromise, Inc. All rights reserved.

28. Questions?

29. Frequently Asked Questions
If I save, will I get less financial aid?
The affect of 529s on financial aid varies, but should not discourage you from saving.
Do CollegeInvest 529 savings need to be used in Colorado?
No. Funds can be used nationwide and sometimes overseas as well.
How much should I save?
The amount needed for school will vary. Helpful tools to help calculate estimated saving needs can be found online at
Is the account in my name or my child’s name?
Anyone with a Social Security Number or Federal Tax ID can be an account owner and/or a beneficiary.
Can I put all of my children on one account?
No. A single social security number must be assigned to each account.
Note: Some restrictions may apply. Please carefully read the Plan Disclosure Statement.

30. Frequently Asked Questions
Can I transfer funds from another college savings account?
Yes. Funds can be rolled over.
What if my student doesn’t go to college?
You can name another beneficiary or you can choose to leave the funds in the account.
You can take a non-qualified withdrawal, which is subject to ordinary income tax and a 10% penalty on earnings plus possible recapture of state tax deductions.
What if my student gets a scholarship?
You may withdraw funds from your account up to the amount of the scholarship without penalty.
What if my child decides not to go to a 4-year college?
Savings can be used at a variety of qualified educational institutions including vocational and technical schools.
Note: Some restrictions may apply. Please carefully read the Plan Disclosure Statement.

31. How do I
get started?

32. Next Steps Open an account today! Choose your payment option
Online at
Enrollment kit
Choose your payment option
Direct Deposit
Automatic Investment Plan
Personal Check
One Time Electronic Bank Transfer (EBT)
Bring Direct Deposit Confirmation to Payroll
If you opened your account online, you’ll receive your confirmation immediately. If you completed a paper application, your confirmation will be mailed to you within 7-10 business days

33. Important Considerations
To learn about CollegeInvest’s 529 program, its objectives, risks, charges, expenses, limitations, restrictions and qualifications regarding the Plans’ benefits and potential tax advantages, please read and consider carefully the Program Disclosure Statements (PDS) available at before investing. Also, check with your or your beneficiary’s home state to learn if it offers tax or other benefits for investing in its own plan. Administered and issued by CollegeInvest. Investments are not guaranteed by CollegeInvest, the State of Colorado, its agencies, The Vanguard Group, Inc., Upromise Investments, Inc., Legg Mason Global Asset Allocation, LLC, or FirstBank, and may lose value, including principal amount invested. The guarantee of Stable Value Plus College Savings Plans is the obligation of MetLife and only to the extent of the Funding Agreement. Smart Choice College Savings Plans are not insured by CollegeInvest, the State of Colorado, or its agencies. However, these funds are FDIC-insured in accordance with the current FDIC coverage limits.

34. Important Considerations
Capacity of Dealer and Other Parties CollegeInvest is the issuer of plan securities and is the trustee of the plans in accordance with Colorado law. CollegeInvest also oversees the Managers' activities and provides certain administrative services, such as marketing, audit, and financial statements, in connection with the plans. Vanguard and Upromise Upromise Investments, Inc. serves as Plan Manager for the CollegeInvest Direct Portfolio College Savings Plan and has overall responsibility for the day-to-day operations, including effecting transactions. The Vanguard Group, Inc. also serves as Plan Manager and Investment Manager for the CollegeInvest Direct Portfolio College Savings Plan, and Vanguard Marketing Corporation, an affiliate of The Vanguard Group, Inc., assists CollegeInvest with marketing and distributing the Direct Portfolio Plan. The Direct Portfolio Plan’s portfolios, although they invest in Vanguard mutual funds, are not mutual funds and you could lose money by investing in the plan. Legg Mason Global Asset Allocation, LLC Legg Mason Global Asset Allocation, LLC, Investment Manager for the CollegeInvest Scholars Choice College Savings Program. Legg Mason Investor Services, LLC is the primary distributor of interest in the Program; together they serve as Manager of the Program. FirstBank FirstBank serves as the Plan Manager for the CollegeInvest Smart Choice College Savings Plan and has overall responsibility for the day-to-day operations, including effecting transactions. FirstBank also assists CollegeInvest with marketing and distributing the CollegeInvest Smart Choice College Savings Plan. FirstBank - Member FDIC. MetLife Insurance Company The MetLife Insurance Company serves as the Investment Manager for the CollegeInvest Stable Value Plus College Savings Plan. CollegeInvest has overall responsibility for the day-to-day operations, including effecting transactions. CollegeInvest, the CollegeInvest logo, CollegeInvest Direct Portfolio College Savings Plan, Scholars Choice, CollegeInvest Smart Choice College Savings Plan, and CollegeInvest Stable Value Plus College Savings Plan are registered trademarks of CollegeInvest. Vanguard is a trademark of The Vanguard Group, Inc. Upromise is a registered service mark of Upromise, Inc. © Copyright 2011 CollegeInvest. All rights reserved.

35. Community Relations Manager
Kaylynn Hemlock
Community Relations Manager