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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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"This should be great news for many New Jersey families."

Joseph Hurley, author of "The Best Way to Save for College" at www.savingforcollege.com