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A child born today can expect to pay over $201,000 for a public college and $390,000 for a private college education.1
Franklin Templeton 529 College Savings Plan, offered nationwide by the New Jersey Higher Education Student Assistance Authority (HESAA),2 takes advantage of Section 529 of the Internal Revenue Code, helping you invest for a college education with significant tax advantages.
There is no federal or state guarantee of investments in the plan. Principal value may be lost, and investing in the plan does not guarantee admission to college or that sufficient funds for college.
Federal tax advantages
Money invested in a 529 college savings plan grows federal income tax deferred and when withdrawn for qualified higher education expenses, earnings are free from federal income tax.
The Benefits of Tax-deferred vs. Taxable Investing
Hypothetical growth of a 529 college savings plan over 18 years, with a $15,000 one-time investment
Each plan account is subject to a $25 annual maintenance fee, an annual program management fee of 0.40% of assets, underlying fund expenses, currently up to 0.82% of assets, which may vary, and sales charges, which vary by class of shares. See the Investor Handbook for more complete information.
These expenses are not reflected in the illustration; if they had been, results shown would be lower.
Tax benefits may be conditioned on meeting certain requirements. Federal tax, a 10% penalty and state tax apply to nonqualified withdrawals of earnings. Generation-skipping tax may apply to substantial transfers to a beneficiary at least two generations below the contributor. See the Investor Handbook for more complete information.
Assumes an 8% annual compounded monthly fixed rate of return, investors are subject to a 25% federal income tax rate and, for the federal income tax-free account, tax-free treatment over the 18-year period. Examples are illustrative only and do not reflect any particular investment or 529 plan fees and expenses which, if reflected, would lower the "Tax-free Account" and "Difference" amounts. 529 plans do not guarantee your investment or any specific rate of return; you may have a gain or a loss on the amounts invested.
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Gift & estate benefits
Contributions to a Franklin Templeton 529 College Savings Plan are generally considered completed gifts for federal gift-, estate-, and generation-skipping transfer tax purposes and they qualify for the $13,000 ($26,000 if a married couple) per beneficiary annual exclusion from taxable gifts. In addition, you may give up to $65,000 in 1 year ($130,000 if a married couple) per beneficiary and treat it as if it were given over a 5-year period, free of gift tax, as long as no other gifts are made to the same beneficiary in that 5-year period.
Tax benefits may be conditioned on meeting certain requirements. Federal tax, a 10% penalty and state tax apply to nonqualified withdrawals of earnings. Generation-skipping tax may apply to substantial transfers to a beneficiary at least two generations below the contributor. Gift examples are general; individual financial circumstances and state laws vary—consult a tax advisor before investing. If the contributor dies within the five-year period, a prorated portion of contributions may be included in their taxable estate. See the Investor Handbook for more complete information.
Professional management
Investment options are managed by Franklin Templeton Investments, one of the largest, longest-established investment fund companies.3 You have flexibility to choose the portfolio that best suits your college investment goals. For more information on your investment options and risk tolerance, click on the "Portfolio options" link to your left.
Flexibility and control
Qualified withdrawals from your Franklin Templeton 529 College Savings Plan can be made when you're ready to pay tuition or other qualified higher education expenses. If the child you've saved for decides not to go to college, you can use the funds to educate another member of the family.
Wide choice of colleges
The student beneficiary of a Franklin Templeton 529 College Savings Plan may attend any university or college and even some proprietary schools accredited by the U.S. Department of Education, including many educational institutions outside the United States. Admission however, is not guaranteed by the 529 plan.
Low minimum investment. You can open a Franklin Templeton 529 College Savings Plan with just $250—or $50 if you elect to participate in our monthly automatic investing option.
High maximum limit. The maximum aggregate plan value per beneficiary is $305,000. This high maximum balance is especially important to contributors seeking a tax-advantaged way to transfer part of their personal estate.
Specific New Jersey resident benefits
If the beneficiaries of, or contributors to, a Franklin Templeton 529 College Savings Plan live in New Jersey, they are eligible for additional plan benefits. The main benefits are:
Double tax-free advantage. Franklin Templeton 529 College Savings Plan is a tax-free investment for New Jersey residents. You won't owe federal or New Jersey state income tax on earnings for any assets that are withdrawn to pay for qualified education expenses.
Tax benefits may be conditioned on meeting certain requirements. Federal tax, a 10% penalty and state tax apply to nonqualified withdrawals of earnings. Generation-skipping tax may apply to substantial transfers to a beneficiary at least two generations below the contributor. See the Investor Handbook for more complete information.
A scholarship of up to $1,500.4 Franklin Templeton 529 College Savings Plan is the only state college investing program to offer a scholarship rewarding students who pursue higher education in New Jersey. The plan offers increasingly larger scholarships based upon how long you save, up to a maximum of $1,500 scholarship for over 12 years of saving.
Please click here to access the Investor Handbook for more information. Use the NJBEST Scholarship Request form to apply.
The plan won't interfere with state financial aid. The first $25,000 of plan contributions will not be considered when determining a student beneficiary's eligibility for need-based financial aid awarded by the state of New Jersey.
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