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GIFT College Investing Plan

Arkansas

The team of Upromise Investments and The Vanguard Group manages the Arkansas' GIFT College Investing Plan, featuring age-based and static portfolio options utilizing Vanguard mutual funds, and an FDIC-insured savings option. Accounts can be linked to the Upromise rewards service.

5-Cap Rating

Resident:
Non-Resident:

Savingforcollege.com's 5-Cap Ratings provides an evaluation and comparison of 529 plans, utilizing a formula that examines dozens of factors grouped into the following categories. (Scale 0 to 5; 5 is highest)

Performance Costs Features Reliability Resident Upgrade
2.37 1.24 3.57 3.60 0.70

General

Program type:

Savings

How to enroll:

Enroll directly with the program.

Initial year of operation:

1999, but substantially changed in February 2005

State agency(ies):

The Arkansas 529 Plan Review Committee, composed of the Director of the Department of Higher Education, the Executive Director of the Arkansas Teacher Retirement System, and the Arkansas State Treasurer

Program manager:

Upromise Investments, Inc.

Program distributor:

Upromise Investments, Inc.

Manager contract term:

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Eligibility

State residency requirements:

None

Who can be a participant/owner in the program?

U.S. citizens and resident aliens 18 years old or older, UGMA/UTMA custodians, and legal entities.

Significant time or age restrictions imposed by the program:

None

Contributions

Maximum contributions:

Accepts contributions until all account balances in Arkansas' 529 plans for the same beneficiary reach $366,000.

Minimum contributions:

With lump-sum contributions, the minimum initial contribution is $25, and the minimum subsequent contribution is $10. With the automatic investment plan, the minimum contribution level is $10 per month or $30 per quarter via bank transfer or $5 per pay period via payroll deduction.

Investment Options

Age-based investment options:

The Age-Based option is offered in 3 different risk levels (Aggressive, Moderate, and Conservative) each containing 4 or 5 portfolios of underlying mutual funds. Contributions are placed into the portfolio corresponding to the risk level selected and the number of years to expected enrollment, and later reassigned to more conservative portfolios as the beneficiary approaches college age.

Static investment options:

Select among 5 multi-fund portfolios with varying risk tolerances, a money-market portfolio, and an FDIC-insured savings option.

Underlying investments:

Vanguard mutual funds, Sallie Mae

Underlying fund allocations:

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Investment performance link:

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Portfolio Fees & Performance Lookup

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Fees & Expenses

Enrollment or application fee:

None.

Account maintenance fee:

$20 annually, waived for Arkansas residents.

Program management fees:

0.75% manager fee; fee includes underlying fund expenses and a 0.125% fee to the state; 0.55% for the Savings Portfolio

Expenses of the underlying investments:

Not applicable, included in the program management fee.

Total asset-based expense ratio:

0.75%; 0.55% for the Savings option

Taxes and other Benefits

Program match on contributions:

Beginning in 2008, the program provides matching grants of up to $500 annually to eligible Arkansas families, based on household income level. For adjusted household income of $30,000 or less, the matching rate is $2 for each $1 contributed. For income of $30,001 to $60,000, the matching rate is $1 for each $1 contributed. Limit one matching grant account per beneficiary. Applications for matching grants are accepted each year between January 1 and April 30.

State tax deduction or credit for contributions:

Contributions to an Arkansas 529 plan of up to $5,000 per year by an individual, and up to $10,000 per year by a married couple filing jointly, are deductible in computing Arkansas taxable income. Contribution deadline is December 31, and state must receive it by a specified date following December 31.

Value of in-state tax benefits:

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State tax recapture provisions:

The principal portion of rollovers and non-qualified withdrawals from this plan are included in Arkansas taxable income to the extent of prior Arkansas tax deductions.

State tax treatment of qualified distributions:

Qualified distributions from Arkansas and non-Arkansas 529 plans are exempt.

State tax treatment of rollovers:

Arkansas follows federal tax-free treatment for rollovers except that outbound rollovers are subject to the recapture of prior state tax deductions.

Does the sponsoring state exclude the value of an account for state financial aid purposes?

No

Does participation in the program provide beneficiaries with any advantages in qualifying for resident tuition status at state institutions?

No

Does the program have a formal agreement with a rewards program or outside scholarship program?

Yes, with the Upromise rewards service.

Statutory protection of an account from creditors:

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Distributions & Terminations

To whom are distributions made payable:

Eligible educational institution, beneficiary, or account owner, as directed by the account owner.

Account Changes

Policy regarding participant/owner changes:

Accepts requests to transfer account ownership.

Documents, Access & Reporting

Does participant have online password-protected access to account?

Yes

Can the complete enrollment process including funding be done online?

Yes

Documents and other services accessible or downloadable on the program's public Web site:

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Contact

Web site:

Click here to visit

Telephone:

1-800-587-7301

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