Starting early and saving often can have a positive impact on the real cost of college. Saving even a modest amount each month in a 529 plan can be an effective strategy to reduce or eliminate your reliance on student loans, which can substantially add to your out-of-pocket costs. Plus, every dollar saved may amount to more than a dollar earned because a 529 plan has the opportunity to benefit from possible compounded earnings that may also grow tax free over time.

You can create an account with just $25 if you set up a monthly automatic contribution plan, which transfers a set amount per month to your account.1 Otherwise, the minimum to open an account is $250, or $1,000 should you and your financial advisor opt for Portfolio Allocator. The more you save, the more likely you are to avoid unnecessary debt.2

All four scenarios show the out-of-pocket cost based on an estimated $100,000 4-year college education at a public university. These scenarios also assume the receipt of approximately $25,000 in financial aid, which will vary depending upon how much is accumulated in a tax-advantaged account. The loan portion of each column is calculated to include a fixed interest rate of 6.25% repaid over 180 months as defined by Sallie Mae (that’s like paying off a 15-year mortgage) following graduation with 54 monthly payments of $25 made during college. All savings in the tax-advantaged account depicted in this chart assume 5% monthly compounded growth from the beneficiary’s birth until age 18. Source: OppenheimerFunds 2013. The hypothetical examples are for illustrative purposes only and do not predict or depict the performance of any specific investment. Actual results may vary.

1 Systematic investment plans do not assure a profit nor guarantee against loss in declining markets. Before investing, investors should evaluate their long-term financial ability to participate in such a plan.

2 A maximum of $400,000 can be contributed per beneficiary. All assets, including earnings, under all 529 plan accounts established in any New Mexico-sponsored 529 plan for the benefit of a particular beneficiary must be aggregated when applying this limit. New contributions will not be allowed once this limit is reached. Earnings, however, will continue to accrue.

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This material is provided for general and educational purposes only, and is not intended to provide legal, tax or investment advice, or for use to avoid penalties that may be imposed under U.S. federal tax laws. Contact your attorney or other advisor regarding your specific legal, investment or tax situation.

Scholar's Edge® is operated as a qualified tuition program offered by The Education Trust Board of New Mexico and is available to all U.S. residents. OFI Private Investments Inc., a subsidiary of OppenheimerFunds, Inc., is the program manager for Scholar's Edge and OppenheimerFunds Distributor, Inc. is the distributor of Scholar's Edge. Some states offer favorable tax treatment to their residents only if they invest in the state's own plan. Investors should consider before investing whether their or their 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, such as financial aid, scholarship funds, and protection from creditors, and should consult their tax advisor. These securities are neither FDIC insured nor guaranteed and may lose value.

Before investing in the Plan, investors should carefully consider the investment objectives, risks, charges and expenses associated with municipal fund securities. The Plan Description contain this and other information about the Plan, and may be obtained by asking your financial advisor, by visiting or calling 1.866.529.SAVE (1.866.529.7283). Investors should read these documents carefully before investing.

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