Independent 529 Plan selected "Best Products of 2003"

Press Release

INDEPENDENT 529 PLAN AVAILABLE TO PUBLIC
A NEW WAY TO PAY FOR PRIVATE COLLEGE AT LESS THAN TODAY'S PRICES

New York, NY (September 3, 2003) — Independent 529 Plan, a new prepaid college tuition plan tailored specifically for private colleges, begins accepting contributions from the general public today and becomes the newest college tuition program under Section 529 of the Internal Revenue Code.

More than 220 private colleges and universities throughout the country have agreed to participate in the Plan that enables purchasers to lock in current tuition rates for future use at any of the participating institutions. Under the Plan, individuals will purchase tuition certificates that can be used for future tuition at any participating institution, assuming academic admission to that institution.

"It's like buying a shopping certificate for use at any of the stores at a mall," said Doug Brown, president and CEO of Tuition Plan Consortium, the Albuquerque, N.M.-based nonprofit group that will oversee the Plan.

For example, let's say private Colleges A and B have become members of the Tuition Plan Consortium honoring certificates purchased under Independent 529 Plan. College A has a tuition cost of $30,000 for this current year and College B, $10,000. A person who makes a $10,000 contribution into Independent 529 Plan this year would receive tuition certificates that would cover 33.3% of College A's tuition for one year; or an entire year at College B, regardless of what tuition costs are at the time the certificates are used.

In fact, because all colleges in the Plan must offer a discount off their current tuition rates, the certificates would cover slightly more tuition at each school in this example. At a minimum, institutions must offer at least a one-half percent discount per year on their current tuition costs but are free to offer more.

Individuals can open Independent 529 Plan accounts at no charge and locate member institutions through the Plan's program manager, TIAA-CREF Tuition Financing, Inc., by calling 1-888-718-7878 or through this site.

To assist parents with gauging the amount of tuition they can prepay with their contributions, TIAA-CREF Tuition Financing, Inc., will ask individuals to name five "favorite" participating institutions with Independent 529 Plan. Each quarter, account owners will receive statements showing how much tuition their contributions have bought at those colleges or universities. Account owners can change the list of "favorites" at any time. Naming a "favorite" institution has no bearing on where a certificate may be used, and is for informational purposes only.

Other features of the Plan include:

• A parent, relative or friend at any income level can establish Independent 529 Plan account for a beneficiary (eventual student) and may substitute on a wide range of relatives as the beneficiary if the original beneficiary does not use the certificate.
• Accounts can be opened for as little as $25 provided contributions total at least $500 within two years. The maximum lifetime contribution limit is equal to five years' worth of tuition at the most expensive participating college in the Plan discounted as if the beneficiary were a newborn.
• The discount and tuition rates are established every July 1, to be applied to purchases made within the new program year. Once set, these rates are fixed for tuition certificates purchased during a program year.
• The number of participating colleges and universities may increase or decrease over time. Tuition certificates must be honored by institutions that were participating while you held your certificate.
• Account owners can contribute up to $11,000 in one year without gift taxes. The maximum contribution for each beneficiary without triggering gift taxes is $55,000 provided contributions are treated as having been made evenly over a five-year period. Joint filers can double that amount.
• Contributions are made on an after-tax basis and under current tax law, there are no federal income taxes to the individual when a tuition certificate is redeemed at a participating institution. The sunset provision in the current tax law calls for the tax-free features of this plan to end on December 31, 2010. Consult a tax advisor for more detailed information.
• If a beneficiary can't use the tuition certificates, refunds and rollovers into other 529 plans are available. Refunds result in income tax and other tax penalties.

Tuition Plan Consortium is a nonprofit organization based in Albuquerque, New Mexico, and was formed in 1996 to make education at independent colleges and universities more affordable and more accessible for families in the United States.

TIAA-CREF Tuition Financing, Inc. is the program manager for the plan and TIAA-CREF Trust Company, FSB, is the program trustee. The TIAA-CREF companies constitute a $283 billion leading financial services organization, including the premier retirement system for colleges and universities.

* The purchase of a Tuition Certificate does not guarantee admission or enrollment at a participating institution and may have an adverse effect on the beneficiary's eligibility for financial aid.

» Current Participating Colleges