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Strategies & Market Trends : College Savings Plans and Strategies -- Ignore unavailable to you. Want to Upgrade?

To: calgal who wrote (7)	4/18/2002 3:48:39 PM
From: BDR	Read Replies (1) \| Respond to of 19

I heard part of this program when it was first broadcast and hope too have time to sit down at my computer and listen to it all the way through. Pre-paid state plans were mentioned as well as 529 plans, education IRAs and issues of portability, etc. Might get your questions answered there. If you get to it late, I think they archive their older programs. Could buy a transcript, too. Public Interest with Kojo Nnamdi wamu.org Monday, April 15, 2002 1:00 - Saving for College If you're not saving for your child's college education, you're missing out on some great deals. Join Kojo to explore the options, from pre-paid tuition to credit card bonus programs. Kristin "Kris" Davis, author, Kiplinger's Financing College: How much you really have to pay -- and how to get the money; Contributing Editor, Kiplinger's Personal Finance magazine William "Bill" Hansen, Deputy Secretary, Department of Education Tim Berry, Treasurer of the State of Indiana, Vice President of the College Savings Plan Network

To: calgal who wrote (7)	5/21/2002 2:30:59 PM
From: Original Mad Dog	Respond to of 19

biz.yahoo.com Tuesday May 21, 2:15 pm Eastern Time Reuters Company News College savings plans more cautious after losses By Cal Mankowski NEW YORK, May 21 (Reuters) - College savings plans are booming in popularity -- but many investors are mired in losses as their stock-heavy portfolios have tumbled during the market slump. Now, sponsors of college savings programs known as "529" plans, which allow parents to invest money for their children's education and earn tax-free returns, are rolling out more conservative investment choices in the hopes of soothing anxious investors. Rhode Island and South Carolina are among the states which have added less risky options to their investment choices as investors look to ease the pain of the stock slump. "Essentially any accounts that had any significant exposure to equity probably lost money (last year)," said Joseph Hurley, a Pittsford, New York accountant who runs the Web site www.savingforcollege.com. The popularity of 529 plans -- now approved by all 50 states and the District of Columbia -- soared after new federal tax rules allowed investors to withdraw money without paying a tax on the earnings. The change kicked in this year. The 529 has been touted as the hot new investment product for financial services firms plagued by the market downturn and lower profits. Industry experts forecast these plans could become as big a business as 401(k) retirement accounts, which have roughly $1.8 trillion in assets. Assets in college savings plans are still relatively small. Total assets in 529 plans, which get their name from the tax code, rose to $13 billion at the end of the first quarter, up from $3 billion at the end of 2000, according to estimates from Boston-based Financial Research Corp. But assets could reach nearly $400 billion by 2010, according to Financial Research projections. The growth is taking place despite losses in many portfolios, especially aggressive portfolios aimed at benefiting younger children with a longer time horizon until college. The younger the beneficiary, the more the age-based plans rely on aggressive growth stocks. Professional investment managers, who run the plans for most states, have offered a range of choices from five or six anywhere up to a few dozen different risk tolerances. Financial planners say that when the beneficiary of a 529 savings program is nearing college age, the money should be invested conservatively. An example of such a conservative choice is the North Carolina Dependable Income Fund, managed by the state treasurer and offered in the state's plan. Other examples are "stable value" funds, which come with guarantees from insurance companies. One company pushing a conservative investment option is Aegon USA Inc., a unit of Dutch insurer Aegon NV (Amsterdam:AEGN.AS - News; NYSE:AEG - News). Since February, the largest state program with about $2.2 billion in assets, Rhode Island's CollegeBoundfund, has offered a "stable value" option known as the Principal-Protection Income Portfolio. Aegon provides an insurance "wrapper" around a bond fund managed by Alliance Capital Management LP (NYSE:AC - News), which runs the investment part of the Rhode Island program. The wrappers are designed to protect the bond prices from market fluctuation, because bond funds can deliver losses when interest rates rise. "We guarantee that the return will never be negative," said Lynn Allen, director of public markets for Aegon Institutional Markets. Of 17 portfolios in the Rhode Island plan run by Alliance Capital, all showed losses in 2001, ranging from 0.5 percent to 13.6 percent. In comparison, the average diversified stock fund fell 10.9 percent in 2001, according to fund data company Lipper Inc., a unit of Reuters Group Plc (London:RTR.L - News; NasdaqNM:RTRSY - News). South Carolina recently launched a stable value option in its program with Aegon, not only providing the wrapper but managing the money as well. Announcements of other stable value options are expected later this year from both Texas and Illinois, Aegon's Allen said. But there is no simple answer to the question of whether investors should abandon aggressive growth portfolios and go for safety when stashing away money for college tuition, financial planners say. "It's like someone who is 20 years away from retirement and has losses," said Michael Furois, a planner based in Chesterton, Indiana. "Now is not the time to get out of those investments, because time is on your side."