TEXAS

Tomorrow's College Investment Plan

Type: Savings

Phone: 800-445-4723

State tax deduction for residents: Texas does not have an income tax

Open to nonresidents: Yes

Refund provisions: Penalty of 10% of earnings

Minimum/maximum contributions: $25 ($15 through payroll deduction)/ $257,460

Created in 2002, the savings plan offers three types of portfolios -- age-based, static-allocation and single-fund -- administered by Enterprise Capital Management, which has some all-star advisers and high-quality funds. The five age-based portfolios offer more exposure to stocks in the early years then shift to fixed-income investments as the beneficiary nears college. The two static portfolios offer a 100% stock option and a 60% equities/40% fixed income option. Or plan participants can choose from 13 single-fund portfolios, such as government securities or socially responsive funds.

There is a $30 annual account fee, which is waved for residents, automatic depostis and accounts with a value of $25,000 or more. For most portfolios, there is a 0.20% administrative fee (some of the age-based and static portfolios fees can be as high as 1.75%, though.) If you buy through a broker, expenses can run as high as 2.3%.

Texas Guaranteed Tuition Plan

Type: Prepaid (contract)

Phone: 800-445-4723

State tax deduction for residents: Texas does not have an income tax

Open to nonresidents: No

Refund provisions: You get back contributions with no interest, less termination fees, until the beneficiary at least 18. Afterward, penalty of 10% of earnings, plus termination fees.

Minimum/maximum contributions: $1,766 (or $18 per month) for a one-year community college contract for a newborn / $65,391 for a five-year private university contract.

Enrollment: Deadlines vary from year to year.

Contracts -- which can be purchased for public or private colleges in Texas -- are priced at a premium over current tuition rates to cover administrative costs. But the plan also charges a $50 application fee, a $3 per-month account maintenance fee on monthly contracts and miscellaneous fees -- to change beneficiaries, for instance, or use your benefits out of state.

Returns can be especially poor when the beneficiary attends a lower-cost in-state school. In some cases, concedes program manager Aaron Demerson, "it might be better to cancel the contract and get the average back," even after sacrificing 10% of your earnings plus a $25 cancellation fee.

Texas backs its plan with a full-faith-and-credit guarantee, but because the state has no income tax, there are no extra tax benefits to keep residents from shopping elsewhere.