Changes for NextGen College Plan 

Joy Hollowell

Folks who’ve invested in Maine’s college savings plan received some disappointing news recently.The state will be cutting out its annual matching grant program.It’s a loss of up to 200 dollars per child each year for many who have the 5-29 accounts.Joy Hollowell tells us why the state is doing away with the money, and what that means for investors…=========It was an incentive for many Mainers to keep investing in the Next Gen college program. Each year, the state would kick in up to 200 dollars per child. But as of January first, the annual matching grant program is gone…”it’s very popular and becoming more so. It just looks to us like it would be unsustainable at the level that we had been funding it.”Beth Bordowitz, Chief Executive Officer for the Finance Authority of Maine says they are victims of their own success, and much of that success has to do with the recently established Harold Alfond College Challenge. More than 2,000 babies in Maine have been given half a Grand, to open a 529 plan with the state.”Happily what we’re finding is that a parent will come in and open an account with the Alfond grant for their new baby, and then they’ll open one or two accounts for the baby’s older brothers or sisters, using our initial matching grant,” says Bordowitz. “So, we’re seeing a real snowball effect, and that has been a huge implication for our ability to continue the ongoing annual matching grant.”Marion Syverson, President of Norumbega Financial in Hampden, says there are still some really good incentives to stick with the Next Gen plan, even without the annal matching grant.”There’s no fee on this account, when it comes to the annual fee, that’s a $50 fee that is waived as a Maine resident,” says Syverson.Contributions to the fund are tax free, and there’s a tax incentive of up to 250-dollars for each beneficiary. Syverson also warns, all that grant money you’ve earned, will go away if the 529 does.”that grant money only sits inside this account. And it is only applicable if the kids uses it for school,” says Syverson.=======Again, the initial matching grant program of $200 is available for new enrollees.And, folks who invested money in 2009 can still apply for the annual matching grant, as long as the form is sent in by June 30th of this year.For more information on the Next Gen College Investing Plan, you can call 1-800-228-3734 or log onto