The Report Card - evaluating states' tuition plans

Kiplinger's Personal Finance Magazine, Feb, 1999

NEW HAMPSHIRE A

$ Unique College Investment Plan 800-544-1722

Enrollment: anytime

Type: savings

This plan invests in 16 Fidelity mutual funds, within seven portfolios that grow more conservative as the beneficiary approaches college age. Earnings are tax-free in New Hampshire.

NEW JERSEY B

NJBest College Savings Trust 877-465-2378

Enrollment: anytime

Type: savings

New Jersey's plan invests in a portfolio that's no more than 40% stocks. The money can be used at any school, but if it stays in state, earnings are state-tax-free and the student is eligible for a one-time $500 scholarship.

NEW YORK A

$ College Choice Tuition Savings Program 877-697-2837

Enrollment: anytime; account must be open three years before first penalty-free withdrawal

Type: savings

TIAA-CREF, the investment firm that manages pension assets for public employees, also manages the money in New York's plan, using portfolios tailored to the beneficiary's age. Up to $5,000 a year in contributions is deductible on New York tax returns, and earnings are state-tax-exempt.

NORTH CAROLINA B

College Vision Fund 800-600-3453

Enrollment: anytime, tenth grade or younger

Type: savings

In a nod to the fact that most families pay for college with both savings and loans, this plan blends the two. Parents of a sixth-grader, for instance, would make payments for the six years until college, the four years during college and the six years following college. Savings accumulated before college earn a fixed rate of return (currently 8%) free from state tax; later payments may go to pay off a low-interest-rate loan.

OHIO B

Prepaid Tuition Program 800-233-6734

Enrollment: October to February (newborns anytime)

Type: prepaid (credits)

Each credit is guaranteed to cover 1% of a year's average tuition and fees at: public colleges in Ohio. You can buy up to 2,000 units (up to $91,000 in 1998). Earnings are free from Ohio tax. Refunds are discouraged: You get your money back in four annual installments--after a one-year wait.

PENNSYLVANIA B

Tuition Account Program 800-440-4000

Enrollment: anytime

Type: prepaid (credits)

Each credit is worth 1/24 of the annual tuition at the Pennsylvania school you choose. Your child need not attend that school, but your earnings will be based on tuition increases there. Earnings are state-tax-free for residents. Tuition is guaranteed in-state, but elsewhere, if the state earns less than the rate of tuition growth at the school you've named, you get the lower return.

RHODE ISLAND A-

$ Higher Education savings Trust 877-474-4378

Enrollment: anytime

Type: savings

J.P. Morgan, Fleet Investment Advisors, Brown Brothers Harriman and Montgomery Asset Management manage the money in Rhode Island's plan, investing 90% of your contributions in stocks until your child is 6 years old, and gradually shifting to 10% in stocks by the time he or she reaches age 17. There's no limit on contributions.

SOUTH CAROLINA B-

Tuition Prepayment Program 888-772-4723

Enrollment: September to December, tenth grade or younger

Type: prepaid (contract)