Georgia Higher Education Plan Management Fee Reduced

Assets in Plan Surpass $300 Million in Over 60,000 Accounts

ATLANTA, (October 17, 2005) - The Georgia Higher Education Savings Plan (GHESP) announced today that it has reduced its annual management fee charged to participants to 0.78 percent from the previous fee of 0.85 percent. The new management fee is effective on Monday, October 17, 2005. Since the management fee is calculated daily, program participants will gain the advantage of the reduced fee immediately.

"This is very good news for families saving for college expenses using Georgia's 529 college savings plan," said Chuck Penuel, Director of the GHESP. "The fee reduction means that more of the money families invest will work to pay for college."

The GHESP, which is administered by TIAA-CREF Tuition Financing, Inc. (TFI), a national leader in managing 529 college savings plans, covers tuition and other qualified college expenses such as eligible room and board, books, and fees at colleges in Georgia and nationwide. The new fee applies to assets in all investment options including the Managed Allocation Option ("age-based" option), Aggressive Managed Allocation Option, and 100% Equity Option, and Balanced Fund Option. The program also offers a Guaranteed Option, which has no management fee.

Since being launched in April 2002, the GHESP has been highly successful. Assets in the GHESP have surpassed $300 million, and the total number of GHESP accounts increased to over 60,000 as of October 2005. In the past year, assets in the program have increased by over 55% and the number of accounts has increased by almost one-third.

"We are pleased to have worked with the state to provide an even better college savings plan for Georgia," said Sherry Thomas Palmer, of TIAA-CREF Tuition Financing Inc., Program Director for the GHESP. "We will continue to work to provide an attractive plan to help individuals with the best investment one can make in a child's future - a college education."

GHESP Highlights:

• State Income Tax Deduction - Account owners who file an itemized Georgia tax return may be eligible for an annual state income tax deduction of up to $2,000.00 per beneficiary if they qualify based on income level. Contributions made by April 15 may be deducted on the preceding year's return for a Georgia tax payer; contributions by an account owner who is a Georgia tax payer are deductible if the account owner is the parent or guardian of the beneficiary and the beneficiary is claimed as a dependent on the parents' or guardians' Georgia income tax return. To claim the deduction, tax payers must itemize deductions for federal and Georgia income tax purposes; contributions made by a Georgia tax payer may be deductible from Georgia taxable income up to a maximum of $2,000 a year per beneficiary (regardless of whether the parents or guardians file joint, single, or separate returns) and the maximum deduction for each beneficiary decreases by $400 for each $1,000 of federal adjusted gross income over $100,000 for a joint return or $50,000 for a separate or single return; rollovers do not qualify for the Georgia income tax deduction.
• Tax-Free Growth and Withdrawals - Contributions to GHESP accounts have the opportunity to grow free from federal and state income tax. Through the power of compounding, the money saved in a tax-deferred account can provide greater potential for growth. And withdrawals used for qualified education expenses, including tuition, eligible room and board, fees and books will be free of both federal and Georgia income tax. Please note that the law allowing federal tax-free qualified withdrawals is set to expire on December 31, 2010. Congress may or may not extend the law beyond this date. In addition, withdrawals for qualified expenses are free of Georgia income tax after the account has been open for one year.
• Estate Benefits - The GHESP offers generous federal gift and estate tax advantages of up to $55,000 ($110,000 for married couples) pro-rated over a five-year period for each beneficiary.
• Investment Options - The GHESP offers families five investment options: Guaranteed Option, Managed Allocation Option (also known as an "age-based" investment option), Aggressive Managed Allocation Option, 100% Equity Option, and a Balanced Fund Option.
• Low Expenses - The GHESP has low costs so more of your investment can go toward education expenses. The low annual asset-based management fee is now just 0.78%.

The program web site - www.path2college529.com - provides complete information and includes on-line enrollment and other on-line services. Information and applications can also be obtained through a customer service center, 1-877-424-4377 (toll free). There are no income or residency restrictions on who can open an account.

For more information about Georgia's Section 529 college savings plan, contact Chuck Penuel at 404-463-0000 or by email at chuckpenuel@otfs.ga.gov.