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About NJBEST 529 College Savings Plan

Use the navigation menu on the left to select topics about NJBEST College Savings Plan, and use the Relevant Links box on the right for additional information and quick links.

Escalating college costs

The price tag for a college education has been growing. For many, the cost of sending a student to college will be second only to the cost of a home purchase.

Did you know that by 2027 it's estimated that:3
  • 4 years at Rutgers University will cost over $306,000.2
  • 4 years at an average public college will cost more than $201,000.3
  • 4 years at an average private college will cost more than $390,000.3
The cost of waiting

The longer you wait to start a college savings plan, the higher your contributions will need to be because you'll have fewer years for your investment to grow in value. The power of federal income tax-free compounding will also have to work for you. See the Relevant Links box to the right for our college planning calculator.

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.

Saving for college can cost less than borrowing

Let's take a hypothetical example. Suppose in 18 years you need just over $202,000 to pay for a child's education. If you invest $418 monthly for 18 years and earn, for example, an 8% investment return, you'll have $202,000. Or, in 18 years you can borrow the $202,000 at 6.00% for a 15-year period. Here's how your costs would compare:
Investment fees and expenses and taxes would lower the saving amount and raise the cost shown. Each plan account is subject to an annual program management fee of 0.40% of assets and underlying fund expenses, currently up to 0.82% of assets, which may vary. See the Investor Handbook for more complete information.


Investors should carefully consider plan investment goals, risks, charges and expenses before investing. To obtain the Investor Handbook, which contains this and other information, call Franklin Templeton Distributors, Inc., the manager and underwriter for the plan, at 1-877/4NJBEST or click here. You should read the Investor Handbook carefully before investing and consider whether your or the beneficiary's home state offers any state tax or other benefits that are available for investments only in its qualified tuition program.
Footnotes
1. 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.
2. The College Board.com, 2008.
3. 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 upon the 5.25% and 6.17% 10-year average annual increase in historical private and public college costs respectively, as reported by The College Board.
4. Source: Salliemae.com. Cost to finance assumes a 6.80% interest rate over 15 years based on the Stafford loan issued by Salliemae after July 1, 2006. Cost to invest in a tax-free investment assumes an 8% annual, compounded monthly fixed rate of interest.

Assumes borrower at some point consolidates all federal education loans into a SMART LOAN account which locks in a lower interest rate, and depending on the loan balance, can extend repayments up to 30 years.

These examples are illustrative only and not representative of any particular investment. 529 plans do not guarantee your investment or any specific rate of return and you may have a gain or a loss on the amounts invested.

Periodic investing does not guarantee a profit or protect against loss in a declining market.

Since such plans involve continuous investment in securities regardless of their fluctuating price levels, it's prudent to consider your financial ability to continue making purchases through period of low price levels.

Relevant Links

Investor kit
College planning calculator