| NJBEST is pleased
to share some exciting new developments.
1999 was a successful year for the program with 12.6 percent
earnings on all savings accounts. Earnings are federally
tax-deferred and free of state income tax when savings are used for
higher education.
Building on this success, Governor Christie Whitman proposed
enhancements to the NJBEST program as part of her 2001 budget address
on January 24, 2000. These new features will help maximize the
potential for long-term returns, reduce administrative costs incurred
by contributors and increase opportunities to earn a new proposed
maximum scholarship amount of $1,500.
AGE-SENSITIVE INVESTING - Under a new age-sensitive investment
strategy, savings for younger children will be placed in a more
aggressive investment portfolio while savings for children closer to
college age will be invested more conservatively. This change is
designed to maximize the potential for higher returns while ensuring
that funds are available when college bills are due. NJBEST is the
only state college savings program where your contributions are
secured by the moral obligation of the state.
REDUCED FEES - The annual maintenance fee of $15 will be reduced to
$5, and the current investment fee of 1 percent will be reduced to .5
percent. These changes will make NJBEST even more affordable to
current and future contributors and make the program one of the most
competitively priced state-sponsored college savings plans.
INCREASED SCHOLARSHIP OPPORTUNITIES - A unique feature of NJBEST is
the opportunity to earn a $500 tax-free scholarship to attend a New
Jersey institution when account contributions total at least $1,200
and other eligibility criteria are met. Under the enhanced plan, for
every additional two years in which the minimum contribution is
deposited, the scholarship amount will be increased by $250, up to a
maximum amount of $1,500. For example, if you save for four years, you
can currently earn a $500 scholarship. With the new scholarship
opportunities, you can save for six years and earn a $750 scholarship;
eight years and earn a $1,000 scholarship; 10 years and earn a $1,250
scholarship; and 12 years or longer and earn a $1,500 scholarship. All
scholarships will be tax-free at federal and state levels.
NJBEST will retain the features that make it one of the most
accessible, convenient and secure plans available to savers. The
highly professional staff of the New Jersey Department of the
Treasury, Division of Investment, will continue to manage the funds.
In addition, NJBEST contributions are backed by the moral obligation
of the State of New Jersey, so no matter what market conditions may be
when your child is ready for college, your contributions will be
available at the time of withdrawal.
We expect these changes to NJBEST will take effect during the next
fiscal year (after July 1, 2000).
Planning for your child’s future is a wise decision. With these
new features to the NJBEST program, the dream of pursuing a higher
education can be more within your reach.
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