Texas 529 Plans Presented by Linda Fernandez Educational

Texas 529 Plans Presented by Linda Fernandez Educational Opportunities and Investment Division Texas Comptroller’s Office

Plans Administered by the State of Texas • College Savings Plans – Texas College Savings Plan®, direct-sold plan – Lone. Star 529 Plan®, advisor-sold plan • Prepaid Tuition Plans – Texas Tuition Promise Fund®, opened in 2008 – Texas Guaranteed Tuition Plan, closed to new enrollment in 2003 • Texas Save and Match Program 2

Assets Under Management (AUM) As of August 31, 2011 AUM # of Active Accounts COLLEGE SAVINGS PLANS Texas College Savings Plan $183, 142, 818 25, 737 Lone. Star 529 Plan $120, 710, 365 17, 311 $303, 853, 183 43, 048 $237, 649, 941 22, 426 $1, 295, 320, 296 89, 182 TOTAL PREPAID TUITION PLANS $1, 532, 970, 237 111, 608 GRAND TOTAL ALL PLANS $1, 836, 823, 420 154, 656 TOTAL COLLEGE SAVINGS PLANS PREPAID TUITION PLANS Texas Tuition Promise Fund Texas Guaranteed Tuition Plan 3

529 College Savings Plans • Texas 529 college savings plans can be used to pay for qualified higher education expenses at most accredited institutions in the U. S. , including vocational schools, two- and four-year colleges and graduate schools, as well as at some foreign institutions. • No residency requirements. Pays Texas 4 -Year Public Colleges Texas Community Colleges Career Schools / Colleges Texas Private or Out-of-State Colleges Tuition Required Fees Lab Fees Books & Materials Room & Board 4

Texas College Savings Plan, Direct-Sold Plan • Two investment options tailored to different growth requirements, situations, and risk tolerances • Age-based option • Static option • Two investment strategies including investment allocations from Oppenheimer. Funds, Dreyfus, Thornburg, Vanguard, and TIAA-CREF • Blended strategy • Index strategy • Managed by OFI Private Investments, Inc. , a subsidiary of Oppenheimer. Funds, Inc. • Fees range from 0. 42% to 0. 84%, including six index age-based portfolios with total fees that range from 0. 51% to 0. 55%, subject to change. 5

Lone. Star 529 Plan, Advisor-Sold Plan Imagine the Possibilities • Designed to help you and your financial advisor find the right fit for your growth requirements, financial and tax situation and risk tolerance. • Two investment options • Age-based option • Static option • Managed by OFI Private Investments, Inc. , a subsidiary of Oppenheimer. Funds, Inc. – Investment allocations from industry leaders Dreyfus, Oppenheimer. Funds, Thornburg Investments, and TIAA-CREF • Fees range from 0. 48% to 2. 32% with a maximum sales charge of 5. 75%, subject to change 6

Texas Tuition Promise Fund • Locks in tuition and required fees at Texas public colleges and universities. • Either the beneficiary must be a Texas resident or the parent must be the purchaser and a Texas resident. • Pays undergraduate tuition and required fees; does not pay for graduate school. • Annual enrollment is Sept 1 -Feb 28/29 (Sept 1 -July 31 for newborns). • Sold in Tuition Units based on actual annual tuition and required fees at Texas four- and two-year public colleges and universities. • Transfer Value is paid to Texas private colleges, career schools, and out-of-state colleges and universities. 1 Pays Texas 4 -Year Public Colleges Texas Community Colleges Tuition Required Fees Transfer Value Career Schools / Colleges Texas Private or Out-of. State Colleges 1 Transfer Value is the lesser of 1) costs the Tuition Unit would cover at a public in-state college or university or 2) the original purchase price of the unit plus or minus the Plan’s net investment earnings or losses on that amount. 7

Sold in Tuition Units Tuition Unit Costs for 2011 -2012 Enrollment Period In general, one tuition unit represents 1% of undergraduate resident tuition and required fees for one 30 semester credit hour academic year (100 units = one academic year) at the Texas public school that most clearly matches the unit’s pricing base. • Type I units will pay at up to the most expensive Texas public 4 -year school ($111. 68/unit). • Type II units will pay weighted average cost at Texas public 4 -year schools ($79. 70/unit). • Type III units will pay weighted average cost charged to residents of the taxing jurisdiction at Texas public 2 -year schools ($20. 54/unit ). • The number of units required for redemption depends on the school selected and the type of units. 8

Flexible Payment Options Lump Sum Plan • Purchase 50 or more units in a single purchase Installment Plan • Price is locked in for the life of the installment plan • All installment payments include annual interest component • Annual or Monthly Payment Plan options include 5 Year, 10 Year or Number of Years to Projected High School Graduation Date Pay-As-You-Go Plan • Buy units whenever you want • Contribute as little as $15 once minimum of one unit is purchased • Plan prices change annually 9

Monthly Payment Plans Based on monthly payment s for 100 Type III or Type II Tuition Units (one academic year) that pay the weighted average cost of tuition and required fees. $90. 38 4 -Year Texas Public College/University $100. 00 $90. 00 $69. 27 $80. 00 $70. 00 $60. 00 $50. 00 $40. 00 $30. 00 Texas Public Community College $17. 86 Newborn 7 -Year Old $23. 30 $20. 00 $10. 00 $0. 00 Type III Type II 10

Comptroller Outreach Activities Grassroots marketing team – Spanish-speaking – Statewide presentations • Over 750, 000 individuals all across the state have learned about our plan • Participated in over 200 statewide events including: Parent Teacher Assns State Agencies (Benefit Fairs) Boys and Girls Club The Y (formerly YMCA) Valley Baptist Hospital Marathon Kids Birth Centers Preschools Austin Feria Para Aprender Texas State Fair Houston Neighborhood Centers Mothers of Multiples Assns Texas Assn of Black Educators Indo-American Chamber of Commerce Houston Knowledge is Power Con Mi Madre Hispanic Mother Group Black and Hispanic Chamber of Commerce Events 11

Outreach Activities Continued • Radio, newspaper and TV interviews in major Hispanic media outlets, including San Antonio, El Paso, Harlingen, Mc. Allen, Laredo, Dallas, and Houston • English and Spanish language radio ads • Partnership with Volunteer Income Tax Assistance (VITA) • Targeted outreach to low-income families • Brochures available in English and Spanish • Spanish-speaking customer service representative • Comptroller-publication Texas Works discusses role of community colleges in meeting demand for skilled workers • Assist 501(c)(3) organizations in establishing scholarship accounts • Comptroller Website has resources for financial aid and scholarships • $25 million Jobs and Education for Texans (JET) program for grants, scholarships, and equipment to provide training to low income Texans attending community colleges and technical institutes 12

Texas Save and Match • Encourages lower income Texas families to save for college tuition by providing matching contributions • Established Texas Match the Promise Foundation, 501(c)(3) charity in 2009 to accept donations • Accepts donations from unclaimed property claimants • Accepts donations through Texas. gov, the state’s Web portal 13

Increase in % of Minority Beneficiaries 0. 35 0. 3 0. 25 0. 2 31% 0. 15 0. 1 16% 0. 05 0 Texas Guaranteed Tuition Plan Texas Tuition Promise Fund 14

Resources • • • http: //www. window. state. tx. us/ http: //www. everychanceeverytexan. org/ https: //www. texastuitionpromisefund. com/ https: //www. texascollegesavings. com/ https: //www. lonestar 529. com/ Thank you! Linda Fernandez Linda. fernandez@cpa. state. tx. us 512 -463 -4863 15