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Even small contributions every month can make a big difference when it’s time to start college − and later, to repay what had to be borrowed. Consider these hypothetical scenarios:

Scenario 1: Terry's parents start investing $100 a month into a 529 plan account right after Terry's birth. In 18 years (assuming a 5% annual rate of return), they could potentially save more than $35,000.1

Scenario 2: After exhausting federal student aid options, Terry has to borrow $35,000 to attend college. Based on a private student loan rate of 7.0 percent, Terry could be faced with a monthly payment of $406 for 10 years (or $48,720).2

A hypothetical example of savings versus borrowing for college. Assumptions are that saving $35,000 can have you earn $13,400 while saving $21,600. Borrowing hypothesizes that the principal amount will be $35,000 while the interest you pay back is $13,720. Borrowing ends up costing more than saving.


 

1A plan of regular investment cannot ensure a profit or protect against a loss in a declining market.
2This hypothetical example is for illustrative purposes only and assumes no withdrawals made during the period shown. It does not represent an actual investment in any particular 529 plan and does not reflect the effect of fees and expenses. Your actual investment return may be higher or lower than that shown. The loan repayment terms are also hypothetical.

For more information about the Kentucky Educational Savings Plan Trust (KY Saves 529), call 877-598-7878 or visit www.kysaves.com to obtain a Program Description, which includes investment objectives, risks, charges, expenses, and other important information. Read and consider it carefully before investing.

Please Note: Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in that state’s qualified tuition program. You also may wish to contact directly your home state’s 529 college savings plan(s), or any other 529 plan, to learn more about those plans’ features, benefits, and limitations. You should also consult your financial, tax, or other advisor to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision.

KY Saves 529 is administered by the Kentucky Higher Education Assistance Authority. Ascensus College Savings Recordkeeping Services, LLC, is the Program Manager. The Program Manager and its affiliates have overall responsibility for the program’s day-to-day operations, including investment advisory services, recordkeeping, and administrative services.

Investment returns will vary depending upon the performance of the Investment Options you choose. Except to the extent of FDIC insurance available for the Capital Preservation Option, depending on market conditions, you could lose all or a portion of your money by investing in KY Saves 529. Account Owners assume all investment risks as well as responsibility for any federal and state tax consequences.

Ugift is a registered service mark of Ascensus Broker Dealer Services, LLC.

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