Glossary

401(k)

An employer sponsored retirement investment account. An employer company contracts with a brokerage company to manage the retirement plan for its employees. Employees elect to have a portion of their payroll deducted before taxes are taken out, and this amount is deposited with the brokerage. Some employers offer to match contributions that their employees make in the 401(k) plan.

403(b)

An employer sponsored retirement investment account. An employer company contracts with a brokerage company to manage the retirement plan for its employees. Employees elect to have a portion of their payroll deducted before taxes are taken out, and this amount is deposited with the brokerage. Some employers offer to match contributions that their employees make in the 403(b) plan. 403(b) plans are only available to employees of non-profit organizations.

529 Beneficiary

The person identified on the Account Application as the beneficiary of the Account whose Qualified Higher Education Expenses will be paid from the Account.

529 College Savings Plan

These state-sponsored college savings plans were established by the federal government in Section 529 of the Internal Revenue Code to encourage families to save more for college. They have important benefits you can't get from other savings plans, making them one of the best ways to save for college. There are two types of 529 plans: prepaid tuition plans and college savings plans.

529 Eligible Educational Institutions

To be an Eligible Educational Institution for purposes of Section 529, an institution must be eligible to participate in certain U.S. Department of Education student financial aid programs. Eligible Educational Institutions include accredited postsecondary educational institutions in the United States or abroad offering credit toward an associate's degree, a bachelor's degree, a graduate-level or professional degree, or another recognized postsecondary credential, and certain postsecondary vocational and proprietary institutions.

Account

When used in reference to a 529 plan, account means your individual College Savings account to which the money you contribute will be allocated. You may open more than one Account for the same Student.

Account Application

When used in reference to a 529 plan, refers to the Direct Portfolio College Savings Plan, Stable Value Plus College Savings Plan or Scholars Choice College Saving Program Account Application.

Account Owner (also known as, participant)

The person who establishes the account and controls the assets held in it on behalf of a beneficiary.

Accredited School

An accredited school is a school that is eligible to participate in certain federal student aid programs. This might be a college or graduate school, or a vocational or trade school. Most major colleges and universities are accredited.

Administration or Administrative Fee

A charge for expenses incurred in the administration of a 529 college savings plan, which may include services such as record keeping, auditing, and preparing and printing statements and reports. This fee is deducted from your holdings based on a percentage of your assets in the plan. You can find a description of the fees and expenses charged by a plan in the disclosure statement or plan description.

Age of Majority

The age of majority is the age at which an individual is considered an adult and responsible for their actions in the legal sense. The age of majority varies from state to state in the United States, and in other countries. Usually the age of majority is 18 or 19.

Age-Based Fund Portfolios

College savings plan portfolios that change their asset allocation according to the beneficiary’s age. Initially age-based portfolios invest primarily in stock funds. As the beneficiary grows older, the stock funds are replaced by more conservative investments such as bond funds.

American Opportunity Tax Credit

An educational tax credit designed to reduce education costs. This is an expanded version of the Hope Credit, available for four years of college and can be used for course materials, in addition to tuition and fees.

Annual Maintenance Fee

Most 529 college savings plans charge annual maintenance fees. These fees usually range from $10 to $50. Many plans reduce or eliminate this fee for residents, if you make automatic contributions, or if you maintain a certain balance, typically $25,000.

Annual Rate of Return

The rate of return on your investment, expressed as a percentage of the total amount invested.

Asset

An item with economic value that an individual or organization owns, such as stocks, real estate, personal property, and business equipment.

Asset Allocation

A strategy for maximizing gains while minimizing risks in your investment portfolio. Asset allocation involves dividing your assets on a percentage basis among different broad categories of investments, including stocks, bonds, and cash.

Automatic Investment Plan (AIP)

Allows you to contribute to your 529 plan account through regular automatic debits from a checking or savings account.

Bachelor's Degree

The undergraduate degree granted by four-year colleges and universities.

Beneficiary or Student

The person you identify on the Account Application as the beneficiary of the Account whose Qualified Higher Education Expenses will be paid from the Account.

Bond

A debt instrument issued by a government or company in order to raise capital. A bond indicates that you have an interest in and claim to the bond issuer's assets. A 529 plan portfolio can be invested in a mutual fund or ETF that owns bonds.

Bond Funds

Mutual funds that invests in bonds. Some bond funds may focus primarily on short-term, intermediate-term and long-term maturities. Also known as fixed-investment funds.

Certificate of Deposit

A certificate from a bank stating that the individual has a specified sum on deposit, usually for a given period of time at a fixed rate of interest.

Class

A single 529 college savings plan or mutual fund may offer more than one "class" of shares to investors. Each class represents a similar interest in the plan’s or fund’s portfolio, but has different fees and expenses. Here are the basic definitions of Class A, B, and C shares:

• Class A Shares - These shares typically charge a front-end sales charge that is deducted from the initial investment.
• Class B Shares - These shares typically do not charge a front-end sales charge. So, unlike Class A shares, all your money is immediately invested. Class B shares normally impose a contingent deferred sales charge (CDSC). The CDSC normally declines each year and is eliminated after a number of years. Class B shares often then "convert" into Class A shares. When they convert, they will begin to charge the same annual fund operating expenses as Class A shares. Before they convert, Class B shares usually have higher annual fund operating expenses than Class A shares.
• Class C Shares - These shares typically do not charge a front-end sales charge. So, unlike Class A shares, all your money is immediately invested. Often Class C shares impose a small charge if you sell your shares within a short time of purchase, usually one year. Class C shares also typically impose higher annual fund operating expenses than Class A share

College Board

A nonprofit educational association of colleges, universities, educational systems and other educational institutions. For more information, see College Board Online (CBO).

College Grant

Free money offered by the school to meet the student’s need, reward merit or both.

College Loan

Offered by the college itself or through an arrangement with a bank. Some colleges offer loans that mimic federal loans, with fixed rates, subsidies on interest and in-school deferments. Other college loans are less generous.

CollegeInvest

CollegeInvest, a not-for-profit division of the Colorado Department of Higher Education. CollegeInvest is the administrator of the Direct Portfolio College Savings Plan, the Scholars Choice College Savings Program, the Smart Choice College Savings Plan, and the Stable Value Plus College Savings Plan. CollegeInvest also offers Education Cents, a financial literacy program to help students and families understand financial matters and their financial situation so that they have the tools needed to help finance their and their family’s higher education.

CollegeInvest 529 College Savings Program Fund Managers

Refers to the financial institution selected by CollegeInvest to provide services in connection with each college savings plan.

CollegeInvest 529 College Savings Program Policy Statement

The Investment Policy Statement established by CollegeInvest. The Policy Statement sets forth the policies, objectives and guidelines that govern the investment of Trust assets.

Commission

A fee to a third party for assisting a business transaction, such as buying or selling an asset.

Compound Interest

Interest credited daily, monthly, quarterly, semi-annually, or annually on both principal and previously credited interest.

Compounding

Calculating interest on both principal and previously earned interest.

Contribution

The money that you invest in a 529 plan.

Cost of Attendance (COA)

The total cost of attending a particular college, including tuition and mandatory fees, room and board, books and supplies, transportation, and personal and miscellaneous expenses. Some schools omit certain costs, such as transportation and personal expenses, from the total, resulting in a lower estimate of need.

Coverdell Education Savings Accounts (ESAs)

A Coverdell ESA is a trust or custodial Account created for the purpose of paying the qualified education expenses of the designated beneficiary of the Account. A College savings plan in which contributions grow on a tax-deferred basis and withdrawals are tax-free if used to pay for a broad range of educational expenses, including private high school tuition. Unlike 529 plans, ESAs have annual contribution limits and income restrictions.

CSS Profile

The financial-aid application, devised by the College Board, that many private colleges use to determine eligibility for institutional financial aid.

Custodial Accounts

Uniform Gift to Minors Act (UGMA) or Uniform Transfer to Minors Act (UTMA) accounts, created for the benefit of a child. An adult controls the funds until the child reaches the age of majority, at which point the account transfers into the child’s name.

Custodial Parent

If a student's parents are divorced or separated, the custodial parent is the one with whom the student lived the most during the past 12 months. The student's need analysis is based on financial information supplied by the custodial parent.

Custodian

The adult who has control over a custodial account.

Direct-Sold and Broker-Sold Plans

• "Direct-Sold College Savings Plans"- You buy an interest in the college saving plan directly from a
   broker-dealer on behalf of the state, the state that sponsors the plan, or from the plan's program
   manager, with no sales person involved.
• "Broker-Sold College Savings Plans" - You buy an interest in a college saving plan through an invest-
   ment adviser, brokerage firm, or bank, generally paying a sales load or fee. Purchasing through
   a broker, you may be able to reduce the front-end load for purchasing Class A shares if you invest
   above certain threshold amounts (breakpoint discounts). 

Disclosure Statement or Plan Description

Similar to a mutual fund’s prospectus, a 529 college savings plan’s disclosure statement or plan description (these terms are interchangeable) provides detailed information about the plan, including investment options and fees and expenses. You can find the disclosure statement or plan description on the 529 plan’s Web site, where it is usually in a downloadable PDF-format. On some fund Web sites, you must first click on “start to enroll” to get to a downloadable disclosure statement or plan description link.

Earnings

The growth generated by an investment.

Education IRA

See Coverdell Education Savings Account (CESA or ESA).

EFC

Expected Family Contribution - The number that's used to determine your eligibility for Federal student financial aid and the amount of aid that you will receive. This number results from the financial information you provided on the FAFSA.

Electronic funds transfer (EFT)

A computer-based process in which money is transferred from one account to another. The money is transferred electronically instead of using paper.  EBT"electronic bank transfer is a transfer of money from a bank account to another account

Eligible Educational Institution

An institution must be eligible in order to use the assets of a 529 plan account without incurring tax penalties. Generally, a post-secondary institution that offers credit toward a degree or credential. Certain trade and vocational institutions also qualify. An institution must be eligible to participate in Federal Financial Assistance under Title IV of the Higher Education Act of 1965. Visit http://www.savingforcollege.com/eligible_institutions/ to for eligible schools.

Employee Benefit

Compensation that an employee receives in addition to a wage or salary. Examples include health insurance, life insurance, childcare, and subsidized meals.

Employer-sponsored retirement savings plan

A government-approved program through which an employer can assist workers in building their personal retirement funds. Tax-deferred investment programs, such as 401(k) plans for corporate employees and Section 457 plans for state and local government employees, which provide, in some cases, employer matching funds.

Employer-Sponsored Savings Plan

A government-approved program through which an employer can assist workers in building their personal retirement funds.

Estate

The assets and debts that a person leaves at death.

Exchange (annual investment exchange)

The law allows you to make a change in your 529 plan investment choices once per calendar year. This is referred to as the annual investment exchange

Exchange-Traded Fund (ETF)

A type of investment, traded on exchanges, which combines features of mutual funds, stocks, and bonds. ETFs are often funds that, like index mutual funds, represent portfolios of securities (like stocks or bonds) that track specific indexes. A 529 portfolio can be invested in ETFs, but it is not itself an ETF.

Expected Family Contribution (EFC)

The number that's used to determine your eligibility for Federal student financial aid and the amount of aid that you will receive. This number results from the financial information you provided on the FAFSA.

Family Member

A member of the family" of a beneficiary is a person related to that beneficiary as follows: (i) a son or daughter

Federal Deposit Insurance Corporation (FDIC)

A federal agency that insures deposits in banks.

Federal Direct Student Loan Program (FDSLP)

Similar to the Federal Family Education Loan Program (FFELP). The funds for these loans are provided by the US government directly to students and their parents through their schools. Benefits of the program include a faster turn-around time and less bureaucracy than the old bank loan" program. The FDSLP includes the Federal Direct Stafford Loan (Subsidized and Unsubsidized) and the Federal Direct Parent Loan for Undergraduate Students (PLUS)."

Federal Family Education Loan Program (FFELP)

FFELP is one of two parallel federal education loan programs. The other is the Direct Loan program. Both offer the same sets of loans (e.g., Stafford, PLUS and Consolidation loans) with only slight differences. The main difference is in the source of funds. In the FFEL program the funds normally come from private capital such as banks, credit unions and other financial institutions, while in the Direct Loan program the funds come from the US Treasury through the US Department of Education. The federal government guarantees FFELP loans against borrower default and ensures that the lenders receive a market rate of return on the loans despite the lower interest rates paid by borrowers of education loans.

Federal Methodology

The need analysis formula used to determine the EFC. The Federal Methodology takes family size, the number of family members in college, taxable and nontaxable income and assets into account. Unlike most Institutional Methodologies, however, the Federal Methodology does not consider the net value of the family residence.

Financial adviser

A person who provides financial information and advice. Examples include employee benefits staff, bank and credit union employees, credit counselors, brokers, financial planners, accountants, insurance agents, and attorneys.

Financial Aid

Money provided to the student and the family to help them pay for the student's education or which is conditioned on the student's attendance at an educational institution. Major forms of financial aid include gift aid (grants and scholarships) and self-help aid (loans and work).

Financial Aid Administrator (FAA)

A college or university employee who is involved in the administration of financial aid. Some schools call FAAs Financial Aid Advisors" or "Financial Aid Counselors"."

Financial Aid Form (FAF)

The old name for the Financial Aid PROFILE. The Financial Aid PROFILE is a supplemental financial aid form processed by the College Scholarship Service (CSS). It is not necessary to file a Financial Aid PROFILE in order to apply for Federal student financial aid; the FAFSA is sufficient. The Financial Aid PROFILE is used by many private colleges and universities for awarding institutional funds.

Free Application for Federal Student Aid (FAFSA)

The first step in getting aid for college, this free application will ask for demographic and financial information to determine the family EFC. Colleges use the results of the FAFSA to award aid.

Fund Manager

Refers to a financial institution selected to provide services in connection with investment plans.

funds

Mutual funds in which the Portfolio assets may be invested from time to time and which are managed by the Manager's affiliates or other entities not affiliated with the Manager. The Manager recommends to CollegeInvest for its approval the particular Funds, if any, in accordance with the Policy Statement.

Gift Tax

A tax assessed against a person who gives money or assets to another person without receiving fair compensation.

Graduate PLUS Loan

Federal loans for graduate students. Like Stafford loans, they're made through either the Direct Loan or the FFEL program. PLUS loans are unsubsidized and the federal government sets the interest rate for the FFEL program. For current interest rates visit our Graduate PLUS loan page. In the Direct Loan program the interest rate is set at 7.9%. To get a Graduate PLUS loan, you must first take your maximum Stafford eligibility and must also qualify for credit. Graduate students may borrow up to the cost of attendance, minus any other financial aid received.

Grant

Awarded based on need or merit, grants do not need to be repaid. Grants come from federal and state governments, colleges and even private companies or organizations.

Hope Credit

An education tax credit designed to reduce education costs. Renamed the American Opportunity Tax Credit.

Index Fund

A type of mutual fund with a portfolio constructed to match or track the components of a market index, such as the Standard & Poor's 500 Index (S&P 500). An index mutual fund is said to provide broad market exposure, low operating expenses and low portfolio turnover and is a form of passive investing.

Individual Account Application

This is the Account application typically used by an individual (parent, grandparent, family member or friend). Download the Individual Account application (PDF)."

Individual Portfolio

A type of static asset investment vehicle used in 529 plans. You can generally create your own diversified portfolio from among the plan's choices. Unlike an age-based portfolio, this will not rebalance automatically; you have to make the reallocations manually. (See age-based portfolio.)

Individual Retirement Account (IRA)

An investment with specific tax advantages. A traditional IRA defers taxes on earnings until withdrawal and, under certain circumstances, allows the deduction of some contributions from current taxable income. A Roth IRA requires after-tax contributions only, but allows tax-free withdrawals under certain rules.

Interest

1. Cost of borrowing money. 2. Earnings from lending money.

Internal Revenue Service (IRS)

Federal agency responsible for enforcing US tax laws and collecting taxes.

Investment Manager

An investment manager is selected by CollegeInvest to be responsible for the investments of the plan portfolio and underlying funds.

Investment Option

The designation of a contribution received by the Trust to a particular trust portfolio and the resulting investment of such contribution.

Investment Policy

The objectives and guidelines that govern the investment of the Plan Assets.

Lifetime Learning Credit

An education tax credit designed to reduce the costs of college education. It can only be claimed once per tax return regardless of the number of children you have enrolled in college at the same time.

Management Fees

As it relates to investments: The amount the fund charges investors to pay advisors and others involved in administering the fund.

Manager

Refers to the financial institution selected by CollegeInvest to provide services in connection with each college savings plan.

Maximum Contribution Limit

The aggregate balance in all Program Accounts on behalf of a particular Beneficiary which may not be exceeded through additional contributions (currently $280,000).

Member of the Family (for purposes of Section 529)

a person related to the Beneficiary as follows: (i) a son or daughter, or a descendant of either; (ii) a stepson or stepdaughter; (iii) a brother, sister, stepbrother or stepsister; (iv) the father or mother, or an ancestor of either; (v) a stepfather or stepmother; (vi) a son or daughter of a brother or sister; (vii) a brother or sister of the father or mother; (viii) a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law; (ix) the spouse of the Beneficiary or of any of the other foregoing individuals; or (x) a first cousin. For purposes of the member of the family" definition

Modified Adjusted Gross Income

Your annual adjusted gross income without taking into account any IRA deduction, student loan interest deduction, or certain other deductions as specified under the Internal Revenue Code.

Money Market Fund

A mutual fund that sells shares of ownership and uses the proceeds to purchase short-term, high-quality securities such as Treasury bills, negotiable certificates of deposit, and commercial paper.

Mutual fund

A pool of money from many investors that invests in a basket" of securities (stocks

Non-Age Based Investment Options

Any college savings plan portfolio that doesn’t shift asset allocation according to the age of the beneficiary.

Non-Qualified Distribution

a withdrawal of money from an Account for any purpose other than to pay the qualified higher educational expenses of the Beneficiary at an Eligible Educational Institution.

Non-Qualified Withdrawals

Withdrawals from a college savings account that are used for non-college related expenses. Non-qualified withdrawals are subject to income tax and an additional 10-percent penalty on earnings.

Parent Contribution (PC)

An estimate of the portion of your educational expenses that the federal government believes your parents can afford. It is based on their income, the number of parents earning income, assets, family size, the number of family members currently attending a university and other relevant factors. Students who qualify as independent are not expected to have a parent contribution.

Parent Loans for Undergraduate Students (PLUS)

Federal loans available to parents of dependent undergraduate students to help finance the child's education. Parents may borrow up to the full cost of their children's education, less the amount of any other financial aid received. PLUS Loans may be used to pay the EFC. There is a minimal credit check required for the PLUS loan, so a good credit history is required.

Pell Grant

A federal grant that provides funds of up to $5,550 (2010-11) based on the student's financial need.

Perkins Loan (federal)

For high-need students, up to $5,500 a year for undergraduates and up to $8,000 a year for graduate students. Amount depends on the availability of funds and level of need. Interest is fixed at 5% and subsidized until repayment, which begins nine months after graduation. The loan may

Plan Disclosure Statement (PDS)

The applicable Plan Disclosure Statement for each of CollegeInvest's College Savings Plans, as amended and supplemented from time to time.

Plan Manager

The plan manager is the person or entity that the State engages to provide administrative and other services for the plan.

Policy Statement

Refers to the Investment Policy Statement established by CollegeInvest. The Policy Statement sets forth the policies, objectives and guidelines that govern the investment of Trust assets.

Portfolio

An investment offered through a 529 plan; it is made up of municipal securities. When you invest in a 529 plan portfolio you are buying units of the portfolio (not the underlying mutual fund or ETF).

Prepaid Tuition Plan

A type of 529 plan in which your contributions go toward the cost of enrollment at a college (sometimes limited to in-state, though that can differ with the plan). This is different from savings plans, whose assets can be used at any eligible institution around the country.

Prospectus

A legal document that provides detailed information about mutual funds, stocks, bonds, and other investments offered for sale, as required by the Securities and Exchange Commission.

Qualified Distribution

 A distribution from an Account to pay the qualified higher education expenses of the Beneficiary at an Eligible Educational Institution.

Qualified Education Expenses

Expenses for tuition, fees, books, supplies and equipment required for enrollment at any eligible college, university or vocational school in the U.S. and at many foreign colleges. You also can use the money for room and board, as long as the beneficiary is at least a half-time student. The full cost of room and board counts if the student's housing is owned or operated by the college. Off-campus housing costs can qualify, too, up to the allowance for room and board that the college includes in its cost of attendance for federal financial-aid purposes (your college financial-aid office can give you that figure).

Qualified Withdrawals

Any withdrawals from a college savings account that are used at eligible schools for college-related expenses. These withdrawals are tax-free and cover expenses such as tuition, room and board, book and supplies, and other required equipment intended for college use.

Risk

A measure of the likelihood of loss or the uncertainty of an investment's rate of return.

Rollover

A tax-free reinvestment from one qualified plan to another within a specific time frame, usually 60 days.
You are permitted to transfer funds from another 529 college savings plan to an account in the CollegeInvest 529 College Savings Plan for the same beneficiary once within a 12-month period without incurring federal income tax. The 529 college savings plan from which you are transferring funds may be subject to differences in features, costs and surrender charges. You should consult with your tax advisor or the other 529 college savings plan. State and local taxes may apply.

Roth IRA

A tax-deferred retirement account where, unlike a traditional IRA, contributions to a Roth IRA aren't tax-deductible, but there is no tax on withdrawals as long as the taxpayer is age 59 or older and the account has been open for five years.

Rule of 72

A rough calculation of the time or interest rate needed to double the value of an investment. Example: To figure how many years it will take to double a lump sum invested at an annual rate of 8%, divide 72 by 8, for a result of 9 years.)

Savings Bond

A bond is a certificate representing a debt. A U.S. Savings Bond is a loan to the government. The government agrees to repay the amount borrowed, with interest, to the bondholder. The two types of savings bonds are Series EE and inflation-adjusted I Bonds. Savings bonds are often purchased through payroll deduction or at financial institutions in denominations of $50 to $10,000.

Scholarship

A form of financial aid given to undergraduate students to help pay for their education. Most scholarships are restricted to paying all or part of tuition expenses, though some scholarships also cover room and board. Scholarships are a form of gift aid and do not have to be repaid.

Scholarship Search Service

A service that charges a fee to compare the student's profile against a database of scholarship programs. Few students who use a scholarship search service actually win a scholarship. There are several high quality scholarship search services available on the web for free.

Section 529

Section 529 of the Internal Revenue Service Code, the section that specifies the requirements for qualified tuition college savings programs (529 plans).

Stafford Loans

Federal loans for students are made through the U.S. Department of Education program: the William D. Ford Federal Direct Student Loan Program (Direct Loans). Direct loans can be either subsidized or unsubsidized. The government sets the interest rate and limits the amount students can borrow each year.  Independent students and students whose parents do not qualify for a PLUS loan may be eligible to borrow more through the unsubsidized Stafford loan program.

State Grant

Offered to state residents (and sometimes out-of-staters) based on need, merit or both.

Stock (also known as an equity)

A financial instrument that indicates that you have an ownership position in a company. A 529 portfolio may invest in mutual funds that own stocks.

Stock Funds

Mutual funds that invest mainly in stocks. Some stock funds may focus primarily on smaller, mid-sized, or larger corporations, or on specific market sectors. Also known as equity funds.

Student Contribution

The amount of money the federal government expects the student to contribute to his or her education and is included as part of the EFC. The SC depends on the student's income and assets, but can vary from school to school. Usually a student is expected to contribute about 20% of his or her savings and approximately one-half of his summer earnings above $3,000.

Supplemental Education Opportunity Grant

Federal grant program for undergraduate students with exceptional need. SEOG grants are awarded by the school's financial aid office, and provide up to $4,000 per year. To qualify, a student must also be a recipient of a Pell Grant.

Tax Deductible

An expense that can be deducted from annually reported income to reduce the amount of tax payments to the government.

Tax Deferred

When taxes are paid at a future date. In the case of a 529, your earnings grow tax deferred; when they are withdrawn to pay for a qualified education expense, they are tax free.

Tax-Advantaged

An economic bonus which applies to certain accounts or investments that are, by law, tax-reduced, tax-deferred, or tax-free

Tax-Exempt (Tax-Free)

Investments (e.g., municipal bonds) whose earnings are free from tax liability.

Title IV Participation

Institution has a Program Participation Agreement with the US Department of Education (the Department) for eligible students to receive Pell Grants and, depending upon the agreement, other federal aid. For an institution to participate in Title IV financial aid programs, it must offer a program of at least 300 clock hours in length, have accreditation recognized by the US Department of Education, have been in business for at least 2 years, and have signed a participation agreement with the Department.

Trust

A legal arrangement through which a trustor manages a trustee's assets for the good of one or more beneficiaries.

U.S. Series EE and I Savings Bonds

Backed by the full faith and credit of the United States government, U.S. government savings bonds offer a tax-advantaged way to save for college. The interest from these bonds is usually exempt from state and local taxes and is tax free if used for qualified higher education expenses

Underlying Fund

The mutual funds or separately managed investment accounts in which assets of the Portfolios are invested.

Underlying Fund Expenses

Expenses or fees charged by an investment firm for managing funds for college savings plans. These fees come in addition to any administrative or management fees that a state government charges for running a college savings plan.

Uniform Gift to Minors Act (UGMA)

A tax-advantaged custodial account for college savings. An adult acts as the custodian for the account and makes all the investment decisions until the beneficiary reaches the age of majority. At that point the beneficiary controls the account and any assets in the account. UGMA accounts are limited to holding money and securities.

Uniform Transfer to Minors Act (UTMA)

A tax-advantaged custodial account for college savings. An adult acts as the custodian for the account and makes all the investment decisions until the beneficiary reaches the age of majority. These accounts are very similar to UGMA accounts, but in addition to money and securities, UTMA accounts can also hold real estate, fine art, and patents and royalties.

Unit Price

Translation of a consumer product price into the cost per standard size or weight. Unit pricing helps the consumer to make price/value comparisons between brands. Unit prices are usually displayed on supermarket shelf tags along with the package price.

Withdrawal

Money that you take out of a 529 plan account. Withdrawals are either qualified or non-qualified. Qualified withdrawals are those used for qualified education expenses at Eligible educational institutions. All other withdrawals are non-qualified.