Plan Benefits
On this page:
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 sufficient funds for college.
Federal tax advantages
Money invested in a 529 college savings plan grows federal income tax free when withdrawn for qualified higher education expense and earnings are free from federal income tax.
The Benefits of Tax Free 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 0.87% of assets, which may vary, and sales charges, which vary by class of shares. Please refer to 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 are conditioned on meeting certain requirements. Federal income tax, a 10% federal tax penalty, and state income tax and penalties may apply to nonqualified withdrawals of earnings. Generation-skipping tax may apply to substantial transfers to a beneficiary at least two generations below the contributor. Please refer to 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.
Gift and estate benefits
Because contributions to Franklin Templeton 529 College Savings Plan are generally considered completed gifts for federal gift, estate, and generation-skipping transfer tax purposes 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 one 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 are conditioned on meeting certain requirements. Federal income tax, a 10% federal tax penalty, and state income tax and penalties may apply to nonqualified withdrawals of earnings. Generation-skipping tax may apply to substantial transfers to a beneficiary at least two generations below the contributor. Please refer to the Investor Handbook for more complete information.
Professional management
Investment options are managed by Franklin Templeton Investments, one of the largest, longest-established mutual 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, including children, grandchildren, siblings, spouses, nieces, nephews, aunts, uncles, cousins and in-laws.
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.
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.
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 are conditioned on meeting certain requirements. Federal income tax, a 10% federal tax penalty, and state income tax and penalties may apply to nonqualified withdrawals of earnings. Generation-skipping tax may apply to substantial transfers to a beneficiary at least two generations below the contributor. Please refer to 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.
Access the Investor Handbook for more information. Use the NJBEST Scholarship Request form to apply.
Limited interference 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.
Important Legal Information
Investors should carefully consider plan investment goals, risks, charges and expenses before investing. To obtain an Investor Handbook, which contains this and other information, talk to your financial advisor, go to the Order 529 Literature section on this website, or call Franklin Templeton Distributors, Inc., the manager and underwriter for the plan, atFootnotes
- Source: The College Board, Trends in College Pricing, 2008. Projected cost upon child's entrance to college for four years at a public or private college. Figures are based on the 6.32% and 5.25% 10-year average annual increase in historical private and public college costs, respectively, as reported by The College Board for the 2008-2009 school year.
- Offered and administered by the New Jersey Higher Education Student Assistance Authority (HESAA); managed and distributed by Franklin Templeton Distributors Inc., an affiliate of Franklin Resources, Inc., which operates as Franklin Templeton Investments. No federal or state guarantee. Principal value may be lost, and investing in the plan does not guarantee admission to college or sufficient funds for college. Please refer to the Investor Handbook for more complete information.
- The plan is managed by Franklin Templeton Advisors, Inc. an affiliate of Franklin Templeton Distributors, Inc. Plan portfolios generally invest in mutual funds managed by affiliates of Franklin Advisors, Inc.
- Residents of New Jersey who attend college in New Jersey may be eligible for a scholarship. Please refer to the Investor Handbook for more information.
You need Adobe Acrobat Reader 6.0 or higher to view and print PDF documents. Download free version from Adobe's website.
For U.S. residents only.