Trenton, NJ -- The New Jersey Higher Education Student Assistance Authority (HESAA) announced today that the State of New Jersey has reached an agreement with Franklin Templeton Investments that will significantly reduce fees and expand investment options for the NJBEST 529 College Savings Plan.
"We recognized that more had to be done to assist New Jersey families saving for college and pushed for changes," said E. Michael Angulo, HESAA's Executive Director.
Over the last several months, Franklin Templeton and HESAA held extensive negotiations to identify ways to improve the plan while reducing fees. This required consideration of numerous factors, including potential costs, operational and service impacts, and long-term plan success. This was particularly difficult because the original contract was crafted in 2002 and does not expire until 2011. When the current contract expires, HESAA will fully explore all options to allow working families to maximize their college savings.
The agreement, which was reached last week, lowers fees and expands investment options, while insuring that NJBEST's performance and comprehensive service would not be diminished. Additionally, Franklin Templeton has agreed to absorb nearly $200,000 in costs to implement the changes.
Under the agreement, beginning no later than December 2009, the NJBEST program management fee, which is the annual fee that pays for the services of Franklin Templeton, will be reduced by 50 percent, reflecting a roughly $800,000 cumulative savings this year which is expected to increase each year thereafter. The NJBEST plan will offer three risk-adjusted age-based investment tracks, including two new age-based investment tracks -- Conservative Age-Based Portfolios and Moderate Age-Based Portfolios -- with the existing age-based track being renamed Growth Age-Based Portfolios. These changes, combined with the benefits currently offered by NJBEST such as the waiver of the $25 annual maintenance fee, and a scholarship of up to $1,500 for eligible students, are designed to encourage New Jersey families to continue to invest in the future of their children even during difficult economic times.
"We worked closely with Franklin Templeton to implement important changes to NJBEST. As we continue to recover from the national economic downturn, I am pleased that these enhancements will provide a direct benefit to New Jersey families saving for college," Director Angulo concluded.
Since 1959, HESAA, a non-profit, state designated Authority, has delivered over $18 billion in financial aid.
Each year, over 1 million individuals receive assistance from outreach and aid programs administered by
HESAA including the Tuition Aid Grant (TAG) program, the Part-time TAG for County College Students,
NJSTARS and STARS II, the Coordinated Garden State Scholarship program, the Federal Family Education
Loan program, NJCLASS, and NJBEST. For additional information about HESAA please visit our web site at
www.hesaa.org or call our toll-free hotline at 800-792-8670.
Posted 08/20/09 to www.NASFAA.org. Posting of press releases is done as a service to Members and does not imply endorsement or support by NASFAA. NASFAA does not review this information for content or accuracy.
