AGENDA

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Maryland Prepaid College Trust Maryland College
Investment Plan www.collegesavingsmd.org 1-888-4MD
-GRAD Contact Joan Marshall, Executive
Director College Savings Plans of
Maryland jmarshall_at_collegesavingsmd.org 443-769-10
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AGENDA

• College Savings Plans of Maryland Overview
• Eligibility
• Maryland Prepaid College Trust
• Benefits What Does the Plan Pay For?
• Affordable Tuition Plans and Payment Options
• Flexibility Features
• Refunds
• Enrollment and Actuarial Status
• Maryland College Investment Plan
• Investment Options
• Distributions
• Tax Benefits
• Plan Comparison
• College Savings Plans of Maryland Board
• Additional Features Benefits

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College Savings Plans of Maryland Overview

• The College Savings Plans of Maryland is an
  independent, non-profit Maryland State Agency
  that offers two Section 529 college savings plans
  to help families prepare for the future cost of
  college and reduce future debt.
• The Maryland Prepaid College Trust allows you to
  lock-in tomorrows college tuition based on
  todays prices and helps to hedge against future
  tuition increases
• The Maryland College Investment Plan, managed and
  distributed by T. Rowe Price, offers investors a
  variety of investment options
• Both plans can be used at nearly any federally
  accredited college in the country - benefits are
  not exclusive to Maryland colleges

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Plan Eligibility

• Maryland Prepaid College Trust
• Open to 12th graders or younger, including
  newborns
• Either the account holder or child must reside in
  Maryland or DC at the time of enrollment
• 2008 2009 Enrollment Period December 1, 2008
  through April 6, 2009
• Maryland College Investment Plan
• Invest for children or adults no age
  restrictions
• No Maryland or DC residency requirements
• Enrollment open year-round
• You may choose either
  plan or both!

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Maryland Prepaid College Trust

• With the Maryland Prepaid College Trust, you
  commit to fixed payments
• for a future benefit
• When your child goes to college, the Prepaid
  College Trust will pay the full in-state or
  in-county tuition and mandatory fees at any
  Maryland Public College or Community College
• If your child attends an accredited private or
  out-of-state college, the Prepaid College Trust
  will pay up to that years weighted average
  tuition of the Maryland Public Colleges or
  Community Colleges
• The Prepaid College Trust is also backed by a
• MARYLAND LEGISLATIVE GUARANTEE

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Maryland 4-Year Public College Costs
(UNDERGRADUATE IN-STATE TUITION MANDATORY FEES
ONLY)

• 2008-2009
• St. Marys College of Maryland 12,604
• University of Maryland, Baltimore County
  8,780
• University of Maryland, College Park 8,005
• Weighted Average Tuition 7,927
• Towson University 7,314
• University of Baltimore 7,051
• Frostburg State University 6,614
• Salisbury University 6,492
• Morgan State University 6,438
• Bowie State University 6,005
• Coppin State University 5,140
• Tuition benefits are paid per semester A
  beneficiary attending a private or
• out-of-state college for the 2008 2009
  Academic Year receives up to 3,963.50
• per semester or the Minimum Benefit,
  whichever is greater.

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Affordable Select a Tuition Plan

• University Plan 1 semester or 1, 2, 3, 4 or 5
  years at a 4-year college
• Community College Plan 1 or 2 years at a
  Community College
• Two Plus Two Plan 2 years at a Community
  College and 2 years at a 4-year college
• Existing Account Holders can add additional
  semesters or years outside of the enrollment
  period at current prices
• Encourage other family members to purchase
  semesters or years!

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Affordable Select a Payment Option

• Lump Sum One-time payment for the full amount
  of the tuition plan selected
• Annual Payment Equal yearly payments
• 5-Year Monthly Payment 60 equal monthly
  payments
• Extended Monthly Payment Equal monthly payments
  through July of the Beneficiarys projected year
  of high school graduation or year of Initial
  Eligibility
• Down Payment 25, 40 or 55 of the lump sum
  price with the remaining amount to be paid
  monthly or annually

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4 Year University Contract Costs vs.Projected
Weighted Average Tuition
130,460
88,887
65,587
48,517
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Flexible You Can Change, Use, Transfer or Delay
Using Your Account

• Change your Tuition Plan or Payment Option at
  nearly any time
• Use your account if the child attends college at
  least half-time
• Use your account towards graduate school
• Transfer your account to a relative of the child
  (doesnt have to be a sibling)
• Transfer your account to the Maryland College
  Investment Plan at any time (may be helpful for
  children preparing to attend an accredited trade
  and technical school)
• Delay using your benefits for up to 10 years
  after the child graduates high school plus any
  time served in active duty of the military

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Flexible What Happens if My Child Receives a
Scholarship, Grant or Tuition Remission?

• Use your account toward current or future
  eligible higher education expenses such as room
  board, books, course specific fees even
  graduate school
• Combine the grant or scholarship with your
  Prepaid College Trust account to pay for more of
  the actual tuition and fees at a private or
  out-of-state college above the weighted average
  tuition
• Transfer your account to another member of the
  childs family
• Request a refund

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Refundable

• Two scenarios would merit a Refund
• If the child receives a scholarship, grant or
  tuition remission
• If the child dies or disability prohibits college
  attendance
• Reduced Refund Given under all other
  circumstances. You will receive your actual
  payments, less any administrative fees, plus or
  minus
• 50 of the earnings/losses on those payments if
  enrolled lt 3 years
• 90 of the earnings/losses on those payments if
  enrolled 3 years
• Only the account holder may request a refund
• There are federal and Maryland tax implications
  for refunds and reduced refunds

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Enrollment and Actuarial Status

• Approximately 5,900 students are now eligible to
  use their tuition benefits in Maryland and across
  the country
• Of the eligible students using their accounts,
  about one-half use them at private and
  out-of-state colleges and universities and
  one-half use them at Maryland public colleges
• As of 06/30/08, the Trust is 109 funded to meet
  anticipated future tuition payments

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Maryland College Investment Plan

• The Maryland College Investment Plan offers an
  attractive combination of
• financial flexibility, affordability, and tax
  benefits, as well as investment
• management by T. Rowe Price. The Plan was named
  one of the best 529
• college savings plans in the country by
  Morningstar two years in a row!
• The Maryland College Investment Plan offers
  various investment options
• Enrollment-Based Portfolios become more
  conservatively invested as the child ages
• Fixed Portfolios static asset allocations
• Or you can use a mix of both
• The assets in the account can be used to help pay
  for any eligible college expenses including
  tuition, fees, room board, course-specific fees
  or supplies.
• The Maryland College Investment Plan, managed by
  T. Rowe Price, has been named one of the
  countrys best 529 college savings plans by
  Morningstar, Inc., April 2008, based on
  diversification of underlying investments,
  seasoned investment managers, low fees and
  flexibility to suit an individual investor's risk
  tolerance and time horizon.

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Enrollment Based Portfolios STOCKS BONDS
BONDS and INCOME CONSERVATIVE
FIXED-INCOME
target allocations as of 10/01/08
natural progression of portfolio asset
reallocation
Portfolio 2021
Portfolio 2018
Portfolio 2024
Portfolio 2027
12.5
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60
73
87.5
Portfolio 2015
Portfolio 2012
Portfolio for College
Portfolio 2009
10
20
23
40
43
40
57
56
50
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Fixed Portfolios STOCKS BONDS BONDS
and INCOME
Equity Portfolio
Bond and Income Portfolio
Balanced Portfolio
100
100
100
100
40
60
Short-Term Bond Portfolio
Total Equity Market Index Portfolio
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Four Important Notes about Fixed Portfolios 1.
Choose any portfolio you want OR Choose more than
1 portfolio (diversify) 2. You can move funds
from one portfolio to another twice during
2009 3. You can select a new portfolio for each
new contribution 4. Consider investing in a mix
of Enrollment-Based and Fixed Portfolios
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Distributions are Easy

• Complete a Distribution Form available online
• Indicate how much you wish to take as a
  distribution
• Indicate to whom you want the check payable
• You are responsible for retaining records to
  demonstrate whether the funds were used to pay
  for eligible college expenses
• There are federal and Maryland tax implications
  for funds that are not used for eligible college
  expenses. Earnings on a distribution not used
  for qualified expenses may be subject to income
  taxes and a 10 federal penalty

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Unique Maryland Tax Benefits

• Spouses who open separate accounts for the same
  beneficiary could qualify for the
• Maryland income deduction, whether the couple
  files taxes jointly or separately
• Although family members can make contributions
  to your account, encourage them to open
• their own accounts to qualify for the Maryland
  income deduction!

• Prepaid College Trust
• Deduct up to 2,500 from your Maryland adjusted
  gross income per account each year
• 5,000 for two accounts
• 7,500 for three accounts, etc.
• Payments in excess of 2,500 per account can be
  carried forward and deducted in future years
  until the full amount has been deducted

• College Investment Plan
• Deduct up to 2,500 from your Maryland adjusted
  gross income per beneficiary each year
• 5,000 for two beneficiaries
• 7,500 for three beneficiaries, etc.
• Contributions in excess of 2,500 per beneficiary
  can be carried forward and deducted for up to the
  next 10 years

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Additional Tax Benefits

• For Both Plans
• Investment grows tax-deferred at the State and
  federal level
• When funds are used for eligible college
  expenses, earnings are
• Maryland tax-free
• Federally tax-free

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Compare the Plans Flexibility and Affordability

• Maryland College Investment Plan
• Choose from
• Enrollment-Based or Fixed
• Portfolios
• A mix of both
• Minimum investment
• 250 by check OR
• 25 a month through automatic
• monthly contributions
• Maximum Investment up to a total
• account balance of 320,000 per child
  

• Prepaid College Trust
• Choose from
• - 1 semester to 5 years at a 4-year
• college
• - 1 or 2 years at a Community
• College
• - Combination - Two Plus Two Plan
• Three criteria to determine your payment
• Number of semesters/years
• purchased
• Age/Grade of Child
• Payment Plan selected
• Change your tuition plan or payment
• option at nearly any time

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What are the steps to enroll for each plan?

• Prepaid College Trust
• Step 1 Select a Tuition Plan
• Step 2 Select a Payment Option
• Step 3 Complete an enrollment form for each
  child you want to enroll by the end of the
  enrollment period
• Maryland College Investment Plan
• Step 1 Choose one or more investment options
• Step 2 - Choose how much and how often you want
  to contribute
• Step 3 - Complete an enrollment form for each
  child enrollment is open any time
• Please read the entire Enrollment Kit
  before deciding to enroll

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For More Information

• Web site www.collegesavingsmd.org
• Key features of Web site
• On-line enrollment Reduced Enrollment Fee for
  Prepaid College Trust
• Account Access 24 hours a day, seven days a
  week
• One-time contributions
• Video explanation of the plans
• Speaker Request Form
• Occasional Webinars
• Toll free number 1-888-4MD-GRAD
  (1-888-463-4723)
• E-mail mpct_at_collegesavingsmd.org
• US Mail College Savings Plans of Maryland
• 217 East Redwood Street, Suite 1350
• Baltimore, MD 21202

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College Savings Plans of Maryland Board

• Five members serve by virtue of the public office
  they hold
• Nancy K. Kopp State Treasurer
• Peter Franchot State Comptroller
• Nancy S. Grasmick, Ph.D. State Superintendent
  of Public Schools
• William E. Kirwan, Ph.D. Chancellor, University
  System of Maryland
• Dr. James Earl Lyons, Sr. Secretary of Higher
  Education
• Five members are appointed by the Governor
• Susan R. Buswell Retired, Maryland Association
  of Boards of Education
• Norman Freidkin Freidkin, Matrone Horn, P.A.
• Thomas H. Price, III Law Offices of Thomas H.
  Price, III, P.A.
• Gary Dorsch Allegiance Capital
• Lewis A. Robinson Prince Georges County
  Educators Association

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Additional Features Benefits

• Maryland Prepaid College Trust
• Newborns can be enrolled any time during the year
  from the date of their birth until their first
  birthday at prices that are in effect when the
  enrollment is completed
• Maryland College Investment Plan
• No sales loads, commissions or enrollment fees
• Open an account in anticipation of having a child
• Adults can save for themselves if planning for
  future higher education
• General Facts
• Plans are an excellent vehicle for investing
  gifts to children
• Grandparents are a growing enrollment demographic
• Funds in both plans are treated as assets of the
  account holder in determining federal financial
  aid (FAFSA Form)

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