North Dakota Matching Grant Fund Reaches Milestone

BISMARCK–March 22, 2011– College SAVE, the state of North Dakota’s 529 Higher Education Savings Plan, reached a significant milestone recently by providing North Dakota residents over $100,000 in matching grant¹ funds. This program is designed to encourage individuals who have children in their lives who are 12 years old and younger to save money for college.

529 plans offer a variety of tax-advantaged benefits to support students and their families saving for college. College SAVE, administered by Bank of North Dakota (BND) is the only 529 plan in the nation specifically designed for North Dakota residents. Highlights of the plan include a North Dakota state tax deduction on contributions², federal and state tax-free growth on earnings³, tax-free withdrawals on qualified expenses and the College SAVE Matching Grant program.

"Bank of North Dakota has a long history of assisting students in pursuing their higher education goals,” said Eric Hardmeyer, BND president. “The College SAVE Matching Grant program helps motivate people to take that first step in saving for college.”

The program offers a one-time match of up to $300 for singles earning $40,000 adjusted gross income (AGI) or less; or $80,000 AGI or less if married, filing jointly. The program expands the benefit for singles earning $20,000 or less AGI; or $40,000 AGI or less if married, filing jointly. Account owners in this income group can apply for the match up to three years in a row for a potential dollar for dollar match up to $900.

"The costs of college have increased greatly over the years,” said Hardmeyer. “We want to encourage families to save for college costs in advance, thereby reducing the need for student loans.”

Grandparents, neighbors, friends or other family members may open a College SAVE account on behalf of a child. The application needs to be completed no later than 13 months after the College SAVE account is established. Tax documents from the year prior to opening the account are also required to verify residency status and income.

Bank of North Dakota (BND) was established in 1919 and is the only state-owned bank in the United States. BND is overseen by the Industrial Commission of North Dakota, consisting of Gov. Jack Dalrymple as chairman, Attorney General Wayne Stenehjem, and Agriculture Commissioner Doug Goehring.

¹Matching grants are subject to the availability of funds and can be reduced or stopped at BND’s discretion.

²Rollovers from another state’s 529 plan are not eligible for the state income tax deduction.

³Earnings on non-qualified withdrawals are subject to federal income tax and may be subject to a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements.

If you are not a North Dakota taxpayer, consider before investing 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.

The College SAVE Plan is a 529 plan established by the State of North Dakota. Bank of North Dakota acts as trustee of the College SAVE Trust and is responsible for administering the Plan. Upromise Investments, Inc., and Upromise Investment Advisors, LLC, serve as the Plan Manager and Recordkeeping and Servicing Agent, respectively, with overall responsibility for the day-to-day operations, including marketing and distribution of the Plan. The Vanguard Group, Inc. provides underlying investments for the Plan. The Plan’s Portfolios, although they invest in mutual funds, are not mutual funds. Units of the Portfolios are municipal fund securities and the value of units will vary with market conditions.

Investment returns are not guaranteed, and you could lose money by investing in the College SAVE Plan.

The Plan Manager may pay financial intermediaries for certain shareholder support servicing activities and administrative or other client services for accounts held in the Plan (the “Administrative Services Payment”). The Administrative Services Payment shall not be borne by the Plan or its participants, but rather shall be made from the Plan Manager’s own resources. For additional information please refer to the Plan Disclosure Statement or contact your financial advisor.

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