For Immediate Release
November 7, 2007
Comptroller Susan Combs Calls College Savings Plan Improvements “The Start of Something Big”
(AUSTIN) — Families saving for college through Texas’ 529 College Savings Plan will soon have two new and improved plans offering broader investment options, more competitive fees and new names — the direct sold Texas College Savings Plan and the advisor sold LoneStar 529 Plan, for investors who prefer working with a financial professional to help make investment decisions.
Comptroller Susan Combs today announced the state has signed a contract with OFI Private Investments Inc. (OFIPI), a subsidiary of OppenheimerFunds Inc., as the new manager of the state-sponsored college savings plan formerly known as Tomorrow’s College Investment Plan.
“The slogan for our new and improved college savings plan is ‘The Start of Something Big,’” Combs said. “I believe working with OFIPI is the start of a bigger, better opportunity for Texas families to save enough money to help pay the soaring cost of a college education.”
OFIPI will begin managing Texas’ $200 million 529 Plan on Nov. 19. The 20,000 current account holders will transfer automatically from Tomorrow’s College Investment Plan to the direct sold Texas College Savings Plan or the advisor sold LoneStar 529 Plan.
“Texas families can count on OFIPI to offer high-quality, low-cost college savings options for investors who want to participate in their own state’s 529 Plans either directly, or through a financial advisor,” said Raquel Granahan, Vice President, OFI Private Investments. “We are one of the top ten 529 managers in the country, and we also serve as program manager for advisor and direct sold plans in Illinois, New Mexico and Oregon.”
For a child born this year, the projected cost of four years at a public university will exceed $77,000 for tuition and fees alone. Four years of tuition and fees at a private university are expected to exceed $294,000. Room and board, books and other expenses will significantly increase the price tag.
“Those are daunting numbers,” Combs said. “To help families achieve their college dreams, and to continue building a stronger, more prosperous Texas, we need to make it easy for parents of all income levels to save for their children’s education.”
The new plans are convenient, flexible and affordable. You can open an account for $25, and future contributions can be as little as $15. Contributions can be automatically transferred from your bank or deducted from your paycheck. Fees are very competitive with other college savings plans of this size.
Assets in the plans may be used to pay tuition and fees, plus other college expenses like room and board, books and supplies. Money invested in the plan earns tax-free returns, and account withdrawals are also tax free if the money is spent on qualifying college expenses.
The two new plan Web sites, www.texascollegesavings.com and www.lonestar529.com will have useful account management tools to help map your path to your college savings goal; assess your progress; and make contributions, withdrawals and other account transactions and updates online.
For more information on the program management change and the new plans, call (800) 947-0695 until Nov. 19.
Starting Nov.19, to open a Texas College Savings Plan account directly through the state, call (800) 445-GRAD (4723) or visit the Texas College Savings Plan Web site at www.texascollegesavings.com. College savers may wish to contact an investment adviser to enroll in the LoneStar 529 Plan or visit the plan Web site at www.lonestar529.com for more information.
For more information about the Texas College Savings Plan’s and the LoneStar529 Plan’s portfolios, including fees, expenses and risks, please request a plan description from your financial advisor or by calling (800) 947-0695 until Nov. 19 and (800) 445-GRAD (4723) after Nov. 19. Read the plan description carefully before investing. Texas College Savings Plan and LoneStar 529 Plan accounts are not insured by the State of Texas. Principal contributions to and investment returns on an account are not guaranteed by the State of Texas. Investments involve risks, including the possible loss of principal invested.