HONOLULU – Governor Linda Lingle announced today the contribution limit for TuitionEDGE, the State of Hawai`i’s College Savings Program, has been raised to $297,000 – an increase of 17 percent – to reflect the rising costs of higher education.
TuitionEDGE is Hawai`i’s “529 plan,” named after Section 529 of the Internal Revenue Code. The plan offers significant tax savings because it allows federal and state tax-deferred interest earnings growth. The Hawai`i Legislature passed a law last year allowing withdrawals for college expenses (tuition, room and board, and books) to be made free of Hawai`i income tax. Congress made a similar change in 2001, so qualified withdrawals are free of federal income tax as well, although that provision is scheduled to expire December 31, 2010, unless extended by Congress.
“Saving for a child’s college education is one of the most important investments a family will make,” said Governor Lingle. “Raising the amount that can be contributed to a college tuition savings account such as TuitionEDGE will help ensure families are better prepared to meet their child’s higher education goals.”
When TuitionEDGE was launched, the maximum contribution limit was set at $253,000 per account. This ceiling is adjusted each year to track the rising cost of undergraduate and graduate education. The new maximum represents a 17.4 percent increase.
TuitionEDGE is sponsored by the State of Hawai`i and is administered by Delaware Investments, a multi-line investment management organization that manages money for more than 2 million shareholders around the country. TuitionEDGE is available through various participating financial services institutions.
In addition, Delaware Investments has contracted with First Hawaiian Bank to make available TuitionEDGE through the bank’s First Investment Center investment program. Qualified Hawai`i residents, who are account owners or beneficiaries, can purchase TuitionEDGE shares at “no load” – with no sales charge – at First Hawaiian Bank.
Key features of TuitionEDGE are:
1. Three investment options. -- An age-based option. -- A risk tolerance-based option. -- An FDIC-insured savings account option through First Hawaiian Bank. -- Account holders may change allocations of their future contributions at any time; existing balances may be changed once a year.
2. Control of the account.
-- The person who sets up the account (the account owner) is in control of it, not the beneficiary. -- The account owner decides when withdrawals are made and how funds are used.
3. Anyone is eligible.
-- The beneficiary can be a child or grandchild or it could be oneself. -- It may also be someone not related to the account holder. -- No age limit for the beneficiary to receive funds.
4. Low minimum investment amounts.
-- $15 to open an account. -- $15 minimum for subsequent investments.
5. Ability to change beneficiaries to another member of beneficiary’s family.
-- This can be done at any time without penalty. -- If the beneficiary doesn’t use all the money in the account, it can be designated to another beneficiary.
6. Flexibility to use the investments.
-- For use at any accredited public or private educational institution in the United States and overseas, including colleges, universities, law or medical schools, and most community colleges.
Although the State of Hawaii or Delaware Investments cannot guarantee a rate of return on investments, TuitionEDGE has been designed to be an attractive and innovative opportunity to invest for higher education.
For more complete information about TuitionEDGE, including a Disclosure Statement which includes fees and expenses, call First Hawaiian Bank at 643-4529 in Hawaii (1-866-529-3343 national toll free) or go online at www.TuitionEDGE.com. Please read the Disclosure Statement carefully before you invest or send money.
About Delaware Investments:
Delaware Investments is a multi-line investment management organization known for its fundamental research, team-oriented management and dedicated customer service. As of September 30, 2002, Delaware had approximately $82 billion in assets under management. Delaware Investments provides investment products and services to individual investors through a broad line of mutual funds, retirement plan services and other investment products; and to institutional investors, primarily private and public pension funds, foundations, endowment funds, banks and insurance companies. Investment advisory services provided by Delaware Investment Advisers, a series of Delaware Management Business Trust, administrative services provided by Delaware Service Company, Inc. and distribution and marketing services provided by Delaware Distributors, L.P.
About First Hawaiian Bank:
Founded more than 140 years ago, First Hawaiian Bank is Hawaii's largest bank (based on deposits in the state). It has 56 branches throughout Hawaii and five others in Guam and Saipan. It is part of BancWest Corporation, the largest financial institution based in Hawaii with $34.3 billion in assets and more than 350 branches in seven states, Guam and Saipan. First Investment Center is a non-deposit investment program of First Hawaiian Bank. First Investment Center offices are staffed by Investment Specialists, who are registered representatives of BancWest Investment Services, Inc., an independent broker/dealer, member NASD, SIPC. Securities, including TuitionEDGE, are offered by BancWest Investment Services, Inc.
There is no guarantee that any investment portfolio will achieve its investment goals. The value of a TuitionEDGE account will fluctuate, as the value of the mutual fund shares in which it invests fluctuates, so that your investment, when it is withdrawn, may be worth more or less than its original cost.
Securities are not insured by the FDIC, are not deposits or obligations of First Hawaiian Bank and are not guaranteed by First Hawaiian Bank, and are subject to investment risks, including possible loss of the principal invested.
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