MARYLAND

College Investment Plan

Type: Savings

Phone: 888-463-4723

State tax deduction for residents: Deduction for up to $2,500 annually per beneficiary (with a carryforward for large lump-sum contributions)

Open to nonresidents: Yes

Refund provisions: Penalty of 10% of earnings

Minimum/maximum contributions: $250 / $250,000

Maryland now offers a savings plan managed by T. Rowe Price. The plan offers seven different enrollment-based portfolios, ranging from 100% stock funds for students who are more than a decade away from college enrollment to a 20% stock fund/40% bond fund/ 40% money market fund mix for students already in or about to enter college. Or choose one of three fixed portfolios -- equity, bond or balanced. There's a $90 enrollment fee, a $30 annual account fee (which is waived if the account balance is $25,000 or more), 0.38% program fee and expense ratios that range from 0.35% to 0.96%.

Maryland Prepaid College Trust

Type: Prepaid (contract)

Phone: 888-463-4723

State tax deduction for residents: Deduction for up to $2,500 annually per account (with a carryforward for large lump-sum contributions)

Open to nonresidents: No

Refund provisions: No penalties for a refund due to death or disability of the beneficiary or a scholarship, grant or tuition remission. Otherwise, there is a $75 cancellation fee. See below for more information.

Minimum/maximum contributions: $6,440 for a two-year community college contract for a newborn / $40,608 for five-year university contract for a ninth grader.

Enrollment period: (Prepaid) Variable. Enrollment remains open year-round for newborns until they reach their first birthday.

Other: Beneficiary must be in the ninth grade or younger to enroll in the prepaid plan

If you're unhappy with your contract's value in the end, there may be an acceptable alternative because of the plan's unusual refund policy. If you make a noneducation withdrawal after holding a contract for three years, you get back 90% of the amount the state earns on the underlying investments it makes to fund the program. So if the underlying investments have performed well, you could do better taking a nonqualified withdrawal than by actually using a contract for college costs. A contract in existence for less than 3 years will receive a reduced refund equal to the actual payments made plus or minus 50% of the earnings or losses on payments. (Maryland also guarantees a "reasonable" minimum return equal to the return on one-year government securities less 1.2%. The state may also pay out excess returns to participants if the market significantly outperforms tuition inflation.)

Maryland backs its plan with a Maryland State Legislative Guarantee. Administrative fees are numerous, including a $75 enrollment fee and $25 per term to use the contract at an out of state college. Other fees may be incurred if changes are made to existing contracts by the account holder.

State College Savings Plans