NEW JERSEY

New Jersey Better Education Savings Trust (NJBEST)

Type: Savings

Phone: 877-4NJBEST

State tax deduction for residents: No deduction

Open to nonresidents: No

Refund provisions: Penalty of 10% of earnings

Minimum/maximum contributions: $25 per month / $305,000

Other: Earnings are state tax-free

New Jersey's plan run by Franklin Templeton offers an age-based portfolio that's 70% equity until age 8, five blended funds and one stable value fund. There's a 0.4% asset-management fee, plus underlyling fees that range from 0.45% to 1.17%.

Participants are eligible for a $500 scholarship if they attend school in state and contribute at least $1,200 over four years; the scholarship amount increases to $1,500 if you contribute at least $3,600 over 12 years.

The state backs the plan with a "moral obligation clause" that is unusual for savings plans: If earnings are negative, the plan will seek an appropriation from the state legislature to ensure that participants recover their principal.

State College Savings Plans