DC College Savings Plan Reaches $100 Million in Assets

Pension Protection Act and Changes to 'Kiddie Tax' Law Reinforce 529s as Outstanding Choice for College Savings

WASHINGTON (September 25, 2007) - On Wednesday, September 19, the DC College Savings Plan, which opened in November 2002, reached the $100 million mark in assets. This means that District parents, as well as parents from outside the District, have over $100 million dollars set aside for their children to attend college in the future. This milestone coincides with D.C. Mayor Adrian M. Fenty's first-ever DC Mayor's College Awareness Week (September 24 - 28, 2007), an effort to motivate all D.C. students to graduate from high school college-ready and have the chance to attend and graduate from college.

Changes in the Law

Recent changes in tax law make 529 plans more beneficial than ever before. First, the provision allowing the tax-free withdrawal of funds from 529 accounts for educational expenses - set to expire in 2010 - was made permanent in August 2006 via the Pension Protection Act of 2006. This means that withdrawals from 529s will always be tax-free when used for qualified purposes, such as tuition, fees, and room and board.

Also important for parents is the new change to the "kiddie tax," which means children (persons aged 18 or younger, or 18- to 24-year-olds who are full time students) are now subject to the same tax rate as their parents for any investment income over $1,700 per year - making taxable custodial accounts such as UGMAs and UTMAs much less appealing savings options than in the past. As long as the money is used for qualified college expenses, withdrawals from 529 plans are tax-free, with absolutely no "kiddie tax" issues affecting them.

Plan Highlights

Open to everyone in the country, the DC College Savings Plan offers extra tax benefits to District residents, including the ability to deduct up to $3,000 (up to $6,000 for married couples filing jointly, if both own accounts) in contributions to their account from the federal adjusted gross income reported on their District income tax return each year.

Among the fastest growing 529 plans in the U.S.-more than 9,100 participants have invested over $100 million-the DC College Savings Plan has been awarded high marks for performance and cost by Savingforcollege.com, a respected online source for college savings information.

Calvert Asset Management Company, Inc. (Calvert), headquartered in Bethesda, Maryland, serves as program manager for the Plan. With 30 years of experience and more than $15 billion in assets, Calvert is an established financial services firm in Greater Washington and a recognized leader in offering socially responsible mutual funds.

More information about the DC College Savings Plan may be found by calling 800-987-4859 (800-368-2745 for non-D.C. residents).

For more information on the DC College Savings Plan, please contact your financial advisor or call 800.987.4859 (800.368.2745 for non-District residents).  An investor should consider the investment objectives, risks, charges, and expenses of an investment carefully before investing.  The District of Columbia College Savings Trust Program Disclosure Booklet contains this and other information.  Read it carefully before you invest or send money. An investor should also consider, before investing, whether the investor's or designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's 529 college savings plan.