FOR RELEASE:

DiNapoli Announces Expense Reduction
For State's 529 College Savings Plan

New York State Comptroller Thomas P. DiNapoli today announced a significant expense reduction in the state's 529 College Savings Program Direct Plan, providing New Yorkers with one of the lowest cost college savings plans in the country. The Direct Plan's total annual asset-based fee is nearly cut in half, declining from 0.49% to 0.25%, across the plan's entire lineup of Vanguard investment options. This reduction, effective August 29, 2010, could result in savings of nearly $20 million dollars annually for plan participants.

"Family budgets are getting tighter, but families still need to save for college," DiNapoli said. "The 529 Plan is a low-cost, easy-to-use program that helps make college more accessible to New Yorkers. And now the cost is one of the lowest in the nation. When you're saving for college, every dime counts. The lower cost should be even more of an incentive for New York families to prioritize saving."

Today's announcement marks the fifth time in five years that the Comptroller's Office has worked with investment manager Vanguard and program manager Upromise Investments to reduce expenses for plan investors.

The plan's all-in low costs are a result of economies of scale realized by the plan's long-term asset growth, low cost investment options, and operating efficiencies generated from improvements in technology and client service by Vanguard and Upromise Investments.

"Vanguard is pleased to help lower costs for investors in the New York 529 direct plan because we understand how much costs matter. Vanguard has a history of lowering expenses for 529 participants as assets in plans invested in our funds have grown," said Vanguard Chairman and CEO Bill McNabb.

"Upromise Investments, along with Vanguard, shares in Comptroller DiNapoli's commitment to helping New York families effectively invest and save for college," said Jeff Howkins, President of Upromise Investments, program manager of New York's 529 College Savings Program Direct Plan. "Today's reduction in fees furthers that commitment and opens more doors for Direct Plan account holders."

New York's 529 College Savings Program Direct Plan is the nation's largest direct-sold college savings program, with more than $8 billion invested in more than 500,000 accounts. The plan offers 16 low-cost investment portfolios from Vanguard, including three professionally managed age-based options. The New York 529 also enables families to establish accounts with as little as $25, making it an affordable savings vehicle for families at all income levels. It also provides a number of benefits for families saving for college, including tax-free withdrawals when used for qualified higher-education expenses^*. A New York State taxpayer who is also the account owner may also be eligible for a deduction from New York State taxable income of up to $5,000 (or $10,000 for married couples filing jointly).

* Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes. Tax and other benefits are contingent on meeting other requirements, and certain withdrawals are subject to federal, state and local taxes.

Contributions may be subject to recapture in certain circumstances – rollovers to another state's 529 plan or non-qualified withdrawals.

The Comptroller of the State of New York and the New York State Higher Education Services Corporation are the Program Administrators and are responsible for implementing and administering the Direct Plan. Upromise Investments, Inc., and Upromise Investment Advisors, LLC, serve as Program Manager and Recordkeeping and Servicing Agent, respectively, and are responsible for day-to-day operations, including effecting transactions. The Vanguard Group, Inc. serves as the Investment Manager. Vanguard Marketing Corporation markets, distributes, and underwrites the Direct Plan.

No guarantee: None of the State of New York, its agencies, the Federal Deposit Insurance Corporation (FDIC), The Vanguard Group, Inc., Upromise Investments, Inc., nor any of their applicable affiliates insures accounts or guarantees the principal deposited therein or any investment returns on any account or investment portfolio.

New York's 529 College Savings Program currently includes two separate 529 plans. The Direct Plan is sold directly by the Program. You may also participate in the Advisor Plan, which is sold exclusively through financial advisors and has different investment options and higher fees and expenses as well as financial advisor compensation.

Before you invest, consider whether your or the designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program.

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