Cspm Enrollment Kit

7/29/2019 Cspm Enrollment Kit

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Kids Grow up Fast.But they never outgrow a college educatio

20122013Maryland 529 PlanMaryland Prepaid College Trust | Maryland College Investment Pl

Enrollment Highlights Brochur

Heres How to Start Saving:1. Read this booklet first.2. Read the enclosed Disclosure Statement

for the Plan(s) of your choice.

3. Any questions? Check the FrequentlyAsked Questions or call us at888.4MD.GRAD (463.4723).

4. Ready to Enroll? You can enrollonline at CollegeSavingsMD.org orcomplete the form in the middle ofyour Disclosure Statement. Send itin and youre set.


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Dear Friends:

For our children to succeed, a college education is no longer a point of advantage; its almost manda-tory for entry into todays competitive marketplace. But with college costs continuing to rise, payingfor college is becoming increasingly difficult. Doing so requires thoughtful planning and starting yourcollege savings as early as possible.

It is our mission to help Maryland families give their children a college education without accumulatingsignificant debt. Thats why were pleased to offer the College Savings Plans of Maryland, which offerstax-free earnings, a generous Maryland State income deduction, affordable payment plans, flexibleinvestment options, and many other benefits.

In this booklet, youll find information about both options offered by the State of Maryland: theMaryland Prepaid College Trust and the Maryland College Investment Plan. Since each is based on adifferent savings strategy and offers distinct benefits, weve provided easy-to-read charts and tools tohelp you decide which is best for you. You may even choose to enroll in both of them. When yourefinished, youll also find everything you need to open an account.

Sincerely,

College Savings Plans of Maryland Board

Nancy K. KoppState Treasurer, Board Chair

Thomas H. Price, III, Esq.Board Vice Chair

Lewis A. RobinsonBoard Secretary

W. Gary Dorsch

Peter FranchotState Comptroller

Helene Grady

Danette G. Howard, Ph.D.Secretary of Higher Education

Russell V. Kelley, Ph.D.

William E. Kirwan, Ph.D.Chancellor, University Systemof Maryland

Lillian M. Lowery, Ed.D.State Superintendent of Schools

Enrolling in the College Savings Plans of Maryland is an important decision for you and your family. Please read the entireEnrollment Kitcarefully before deciding to enroll. Section 529 plans offered by other states may offer tax or other benefits to taxpay-ers or residents of those states that are not available under the College Savings Plans of Maryland. If you live outside of Maryland, youshould consider any college savings program offered by your home state or your Beneficiarys home state prior to making a decisionto invest in the College Savings Plans of Maryland. In addition, you should periodically assess, and if appropriate, adjust your Section529 plan investment choices with your time horizon, risk tolerance and investment objectives in mind.


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As educators, my husband and I know that although

college is expensive, it will provide a critical foundation

for our six children. As parents, we provide academic/

spiritual support, while the Plans help us provide

financial support. We hope for scholarships, and if

that happens, our savings can be transferred from one

child to another. We are proof that even witha big family, its possible to make financialcontributions for our childrens futures!

Within the College Savings Plans of Maryland, there are two

State-sponsored options to choose from:The Maryland Prepaid College Trust locks in tomorrows tuitionat todays prices and offers affordable payment options and the securityof a Legislative Guarantee.

The Maryland College Investment Plan, managed by T. RowePrice, offers a variety of investment portfolios, flexible contributionamounts, and no sales loads, commissions, or enrollment fee.

Each Plan is based on a different savings strategy and offers distinctbenefits. This Enrollment Kit describes both Plans in detail, along withtheir similarities and differences, and includes definitions of special

terms. This information will help you make the decision thats best foryou, whether its one Plan or a combination of both.

Your child will outgrow his favorite toy, his favorite sneak-ers, his favorite blanket. But theres one investment you cangive him that will last: his college education. The College

Savings Plans of Maryland makes saving for college easyand affordable.

Save here. Go anywhere.The College Savings Plans of Maryland can be used towardsnearly any accredited college nationwidepublic or private,two-year or four-year. Your child can also use the money atU.S. schools that have campuses outside the country.

AffordabilityBecause the College Savings Plans of Maryland offers somany choices, youre sure to find an option that suits yourbudget. You can start saving with as little as $25, using auto-matic monthly contributions in the College Investment Plan,or purchase our community college plan in the PrepaidCollege Trust.

FlexibilityThe Plans also let you choose when and how you use them.Should your child want to delay the start of school, theresflexibility as to when you use your account. And in additionto tuition, we have options you can use to pay for room andboard, books and other eligible college expensesevengraduate school.

Tax benefitsThe College Savings Plans of Maryland offers hard-to-beattax benefits, including tax-free earnings when used towardeligible college expenses, plus an annual Maryland Stateincome deduction on contributions of up to $2,500 peraccount or beneficiary, depending on the Plan you choose.The Prepaid College Trust and the College Investment Planare the only 529 plans that offer this State income deductionfor Maryland taxpayers.

a college educationGive your child the gift that never stops growing:

Ashanti Foster Mother of Bryant (pictured), Quincy, Joshua,

Savannah, Helaynah and Sidney


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Tomorrows tuition at todays pricesM Pepi Coege Tut

With the Maryland Prepaid College Trust, you lock in futurecollege tuition at todays prices, and your account can beused at nearly any college nationwide! You also get impres-

sive Maryland State and federal tax benefits and peace ofmind knowing that the Prepaid College Trust is backed by aMaryland Legislative Guarantee.

Over the last decade, weve seen tuition costs increase atpublic and private colleges nationwide. Even though thesecosts may continue to change by the time your child is readyfor college, your account will pay for the number of yearspurchased, as defined in the Disclosure Statement andsummarized below:

At a Maryland public college

Full in-state or in-county tuition and mandatory feesAt an eligible private or out-of-state collegeor graduate school Up to that years Weighted Average Tuition of the

Maryland public colleges toward the tuition and manda-tory fees at the selected college

Also, if your child receives a scholarship or grant, you canuse your account toward other eligible college expensessuch as room and board, books, course-specific fees, etc.

Projected 4-Year Average Tuition CostMaryland Public Colleges

This chart shows the anticipated Weighted Average Tuition for four yearsat a four-year college based on our projected Weighted Average Tuition for

2013-2014 of $8,900 at Marylands public colleges, which is a 7% increasein tuition over the prior year. This chart assumes future annual increases intuition of 7% annually for each following academic year. A projected 10%annual increase in mandatory fees is also included. Using these assump-tions, the Weighted Average Tuition for four years of college beginning in

2014 would be $42,987, while the four-year Weighted Average Tuition start-ing in 2030 would be $143,603.

After hearing about the Plans from my sister-in-law, and receivin

an inheritance from my parents, our first priority was to open Pr

College Trust accounts for our two sons. It is important to us save now so they wont have to borrow in the future. Amy parents greatly valued education; they would have been plea

to know they helped shape their grandsons future.

$42,987

$57,905

$78,184

$105,823

$143,603

2014-2017 2018-2021 2022-2025 2026-2029 2030-2033

Judy OConnor (pictured, right) Mother of Ryan (also pictured) and Troy


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Tuition PlansThe Prepaid College Trust offers you a variety of tuitionplans, which include payment of tuition and mandatory fees.

UniversityPlan:Purchase one semester or one,two, three, four, or five years at a four-year collegeor university.

Community College Plan:Our most affordable plan.Purchase one or two years at a community college.However, this plan does not require your child to attenda community college. If he or she attends a four-yearcollege, in or out of Maryland, this plan will pay up tothat years Weighted Average Tuition of Marylandscommunity colleges towards the tuition and mandatoryfees at the selected college.

Two-Plus-TwoPlan: Purchase two years at a communitycollege and two years at a four-year college.

Payment OptionsThe Prepaid College Trust also offers several paymentoptions to help you find one to fit your budget.

LumpSum: A one-time payment.

Annual: Equal yearly payments.

Five-YearMonthly: 60 equal monthly payments.

ExtendedMonthly:Equal monthly payments for aspecified number of months that generally continuethrough July 1st of the projected year of the childs col-lege enrollment (or initial year of eligible use for current10th 12th graders).

DownPayments:25%, 40%, or 55% of the lump sum,

with the remaining amount paid by either monthly orannual payments, as described above.

Flexibletuition plans and payment options

Legislative GuaranteeIn the event that the Trust ever experiences a financial shortMaryland law requires the Governor to include funds in the Stbudget to allow the Trust to pay your full benefits. As with the enState budget, the Maryland General Assembly has final approv


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Professionally managed by T. Rowe PriceM Coege Ivetmet P

Stocks Bonds and Income Bonds Money Market

MORE AGGRESSIVE MORE CONSERVATIVEMODERATE

Equity

Portfolio

100%

Total Equity

Market Index

Portfolio

100%

Balanced

Portfolio

60% 40%

Bond and

Income

Portfolio

100%

Short-Term

Bond Portfolio

100%

U.S. Treasury

Money Market

Portfolio

100%

The College Investment Plan offers a broad range of investment options managed by T. Rowe Price, an invest-ment leader with more than 75 years of experience. You can choose from two different approaches or use acombination of both to save for your childs future.

Enrollment-Based PortfoliosChange automatically with your childs time horizon

You simply select a portfolio based on the year closest to when your child is expected to enter college. Portfolios for youngerstudents emphasize stock mutual funds to help assets grow over time, and then shift to an emphasis on bond and fixedincome investments as students approach college age.

Fixed PortfoliosMake your own investment decisions

You can choose from six portfolios that invest in a mix of stocks, bonds, or money market mutual funds. Portfolios withgreater allocations to stock funds generally carry higher risk and the opportunity for higher returns, while portfolios with more

bond and money market funds generally offer less risk and lower returns. These portfolios do not change their investmentmix based on your childs age.

Effective January 2, 2013, the Total Equity Market Index Portfolio becomes the Global Equity Market Index Portfolio, and theShort-Term Bond Portfolio becomes the Inflation Focused Bond Portfolio. While the asset classes identified below remainthe same, changes in these portfolios are explained in the Disclosure Statement.

As every parent, I hope to provide my children with the best education and financial start

that I can. Having used loans to pay for my own college, I know how important it is tosave. We started my oldest daughters account later than I had hoped, but are on track tosee her graduate without student loans!

Stephanie Harte Mother of Alexis, Natalie (pictured, right) and Chelsea (also pictured)

0%

20%

40%

60%

80%

100%

Years in college21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0Years untilcollege enrollment

Portfolio2033

Portfolio2015

Stocks Bonds and Income

Portfolio2030

Portfolio2027

Portfolio2024

Portfolio2021

Portfolio2018

Portfoliofor College

Target allocations as of 10/1/12, except for Portfolio 2033 with target allocation and availability as of 1/2/13.


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Chart assumes a hypothetical 7% rate of return compounded monthly. Thischart is for illustrative purposes and does not represent the return of any spe-cific investment option. Investment returns in a college savings plan will varyand may be higher or lower than this example. Making automatic monthlycontributions does not assure a profit or protect against loss during varyingmarket conditions. The depiction does not include fees and any fees assessedby the investment offering could have an impact on returns.

Saving nowcan make a big difference later

The advantage of starting early.

The chart below shows the difference that starting early and saving monthly can make over time. Investing $200 permonth when your child is born could add up to $86,647 in total savings at the start of college. However, waiting just fiveyears means that youll need to save an extra $140 per month ($340 per month total) to potentially reach that same goal.Or consider it this way: if you start saving $200 monthly at your childs birth, you could have over $35,000 MORE than youwould by waiting five years to start saving. Thats the power of compounding and tax-deferred growth!

$86,647

$50,962

$34,819

$14,402

Per monthfrom birth Per monthfrom age 8 Per monthfrom age 15Per monthfrom age 5

$200pe

rmon

th

$200pe

rmon

th

$200pe

rmon

th

$200 $340 $500 $1,500

COLLEGEAT AGE 18

We help make saving for college affordable

Every little bit helps! You can save as little as $25per monthwith the College Investment Plan. Use the College CostCalculator at CollegeSavingsMD.org to understand thefuture cost of college and to estimate how much you willneed to save to reach your college investment goal.


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As a single mother, I want my teenage son to be successful and go to

college. When I learned about this program, I immediately enrolled

because college costs are so expensive. Since I have been savinglittle by little, he will have no excuse not to go!

Nancy Fuller, with her son Jeffrey

Compare both options within theCoege svig P of M

How can I use the Plans

What

s unique about each Plan

What are thMaryland tax benefits

Are there federal tax benefits

What are the age requirements

Do I have to live in Maryland

When can I enroll

What are my Plan options

What are my payment choices

How much can I contribute

What are thfees and expenses

Why would I choosboth Plans


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ChoosingbothPlansallowsyoutobenefitfromthefeaturesofeachPlananddiversifyyourhighereducationsavings.Youcould use the Prepaid College Trust towards Tuition and the College Investment Plan towards room and board, books, oradditionaltuitionataprivateorout-of-statecollege.YoumayalsobeeligibleforanadditionalMarylandStateincomededuction.

Select one or both Plans. Its a smart choice any way you look at it.

Maryland Prepaid College Trust Maryland College Investment Plan

Use it to pay the full in-state or in-county tuition and mandatoryfees at any Maryland public college or up to the WeightedAverage Tuition toward nearly any private or out-of-state college.

It lets you lock in tomorrows tuition at todays prices, and it is

backed by a Maryland Legislative Guarantee.

Any earnings are Maryland tax-free when used toward eligiblecollege expenses. Each account holder can also deduct upto $2,500 of payments each year from Maryland income peraccount$5,000 for two, $7,500 for three, etc. Payments inexcess of $2,500 per account can be deducted in future yearsuntil the full amount of payments has been deducted.

Yes. Any earnings are federally tax-free when used towardeligible college expenses.

Enrollment is open to children from newborn through 12thgrade, although accounts must be open for at least threeyears before tuition benefits can be paid.

Either the account holder or child must be a resident ofMaryland or Washington, D.C. when the account is opened.

December 1, 2012 through April 8, 2013year-round fornewborns.

There are a variety of tuition plans. Select from one semesteror one to five years at a four-year college, one or two years ata community college, or a combination. You may change yourtuition plan at nearly any time.

There are many different payment options. You can selectthe one thats right for your family budget. The cost is fixedby the number of semesters or years purchased, age of child,and payment plan selected. You may change your paymentoptions at any time.

See What are my payment choices?

The Prices and Fees section of the Prepaid College TrustDisclosure Statement contains information on all applicablefees and expenses.

Use it at nearly any public, private, or technical college nation-wide for any eligible higher education expenses such as tuition,fees, room and board, books, course-specific fees or supplies.

You can choose from a variety of investment options rang-

ing from more aggressive to more conservative investmentstrategies. Your investment return and principal value will vary,depending on the investment option you choose.

Any earnings are Maryland tax-free when used toward eli-gible college expenses. Each account holder can also deductup to $2,500 of contributions each year from Marylandincome per beneficiary$5,000 for two, $7,500 for three, etc.Contributions in excess of $2,500 can be deducted for up tothe next 10 years. Contributions in following years could beeligible for deduction; however, you cannot deduct more than$2,500 per beneficiary in any year or extend the 10-year limiton each years contribution.

Yes. Any earnings are federally tax-free when used towardeligible college expenses.

Enrollment is open to children or adults of any age.

No. There are no State residency requirements.

Any time.

You can invest in enrollment-based portfolios, fixed portfolios,or a combination. Each time you make a contribution, youmay select a new portfolio.

See How much can I contribute?

Your minimum investment is either $25 per portfolio throughautomatic monthly contributions or a $250 minimum initialinvestment per portfolio by check. You can invest up to amaximum account balance of $320,000 per beneficiary.

The Fees and Expenses section of the College InvestmentPlan Disclosure Statement contains information on all appli-cable fees and expenses.


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you also have a College Investment Plan account, you couldapply it toward any other eligible higher education expenses.

What if I experience a financial hardship and

need to withdraw the funds for a purposeother than college expenses? You may requesta distribution or refund at any time. If the funds are notused for eligible college expenses, Maryland State andfederal taxes, plus a 10% federal penalty, will apply to anyearnings portion of your distribution or refund. For detailsabout specific tax and other penalties for each Plan, pleaseread the Certain Federal Tax Considerations and CertainState Tax Considerations sections in each of the enclosedDisclosure Statements.

What if I already have a 529 plan? Can I trans-

fer my account to the College Savings Plansof Maryland? YES. We will accept a rollover of youraccount with another 529 plan into the College SavingsPlans of Maryland. To complete a rollover, simply submitan Enrollment Form for your desired Plan, along with aRollover Form. Both forms are available on our websiteor you may call us for assistance. You may also need tocontact the sponsor of your current 529 plan for additionaldetails on rolling over your account.

When can I enroll a newborn? A newborn infant canbe enrolled in either Plan from the date of his/her birth.An infant under the age of one year can be enrolled inthe Prepaid College Trust any time during the year untilhis/her first birthday at prices that are in effect when theenrollment is completed. You may also enroll in the CollegeInvestment Plan and name yourself as the Beneficiary inanticipation of the birth or adoption of a child or grandchild.

Do my contributions to the College Savings Plansof Maryland qualify as a gift under federal law?YES. The Internal Revenue Code provides that paymentsto an account in the College Savings Plans of Maryland are

a completed gift for federal gift tax purposes. Under certainconditions, you may average your total gift over five years toremain within the annual IRS gift-tax exclusion. Please consultyour tax advisor for more information.

What are the risks involved? As with any invest-ment, there are risks involved in investing in the CollegeSavings Plans of Maryland. To learn about the risks, pleaseread and carefully consider the Risk Factors section inthe Prepaid College Trust Disclosure Statement and theGeneral Risks and Investment Risks sections of the CollegeInvestment Plan Disclosure Statement.

For the Maryland Prepaid College Trust: Choose a tuition plan for your desired number of

semesters or years of college.

Choose the payment plan that best fits yourfamilys budget.

Complete an enrollment form for each child you wantto enroll by the end of the enrollment period eitheronline or postmarked by April 8, 2013.

For the Maryland College Investment Plan: Choose one or more investment options.

Choose how much and how often you wishto contribute.

Complete an enrollment form for each studentyou wish to enroll.

Youll find all the information you need in the DisclosureStatements included with this booklet. Please readthem carefully.

Enrollment Methods:Enroll online at CollegeSavingsMD.org or by usingthe forms weve included, which you may mail or handdeliver. You may also copy these forms for multipleenrollments. Enrolling online may require use of a credit

card to pay the enrollment fee(s) for the Prepaid CollegeTrust. This is the only time the College Savings Plans ofMaryland will accept a credit card.

Payment Methods:You can pay by automatic contributions from your bankaccount, payroll deduction from a participating employer,check or money order.

To take advantage of the Maryland income deductionfor the 2012 tax year, your enrollment form and contribu-

tion must be either completed online or postmarked byDecember 31, 2012.

Enroll now Its Easy


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Administrator

217 east rdwood Stt, Suit 1350 | Baltio, mD 21202 | 443.769.1023monday though Fiday 8:30 a.. to 5:00 p..

CollgSavingsmD.og | 888.4mD.GrAD (463.4723)

Mailing Address217 East Redwood Street, Suite 1350Baltimore, MD 21202

Fax: 410.333.2295Monday through Friday 8:30 a.m. to 5:00 p.m.

For General Inquiries:

[email protected]: [email protected]

Mailing AddressP.O. Box 17479Baltimore, MD 21297-1479

Fax: [email protected]

T. Rowe Price Associates, Inc., Program Manager

and Investment Adviser

T. Rowe Price Investment Services, Inc.,Distributor/Underwriter

This Highlights Booklet is part of the College Savings Plans of Maryland Enrollment Kit.The Enrollment Kit consists of this Highlights Booklet and Disclosure Statements for the

Prepaid College Trust and the College Investment Plan, with accompanying Enrollment

Forms. The Enrollment Kit has been identified by the College Savings Plans of Marylandas the Offering Materials intended to provide substantive disclosure of the terms and

conditions of an investment in the College Savings Plans of Maryland. The Enrollment Kit is

designed to comply with the Disclosure Principles Statement No. 5, adopted by the CollegeSavings Plans Network on May 3, 2011.

Copyright 2012 College Savings Plans of Maryland and T. Rowe Price Associates, Inc.

124446 11/12

M PepiCoege Tut

M CoegeIvetmet P

Where to find more informationPrepaid College Trust Disclosure Statement

Investment Options ......................................... 3

Federal and State Tax Information ............... 12,14

Account Holder and Beneficiary Requirements....16

About the Administrator................................. 10

Contribution and Withdrawal Limitationsand Penalties........................................ 18-20

Risk Factors .................................................... 9

Fees and Costs ................................................. ........ 7

Investment Performance ........................................ 12

Where to find more informationCollege Investment Plan Disclosure Statement

Investment Options ........................................ 9

Federal and State Tax Information ...............16,17

Account Holder and Beneficiary Requirements.....2

About the Administrator................................. 20

Contribution and Withdrawal Limitationsand Penalties......................................... 7,19

Risk Factors ............................................... 6,15

Fees and Costs .......................................................... 2

Investment Performance................................. 13

Check out our YouTube channel for

videos, interviews, radio ads and more!


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20122013 Disclosure Statement and Enrollment Form

Enrollment Period: December 1, 2012 April 8, 2013

Maryland Prepaid College Trust

Pictured: Top Inset Photo, Shelby and Stephanie College Savings Plans of Maryland Beneficiary and Account Holder.

Bottom Inset Photo, Quincy, Savannah, Joshua, Helaynah College Savings Plans of Maryland Beneficiaries.


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Table of Contents

Frequently Asked Questions ...................................................................................................................................................................................1

Prices and Fees..............................................................................................................................................................................................................3

Operations and Additional Information .............................................................................................................................................................9

Risk Factors ...................................................................................................................................................................................................9

Prepaid College Trust Operations ...................................................................................................................................................10

Plan Governance and Administration ............................................................................................................................................10

Comprehensive Investment Plan .....................................................................................................................................................11

Performance Information ......................................................................................................................................................................12

Contract Pricing .........................................................................................................................................................................................12

Certain Federal Tax Considerations ...............................................................................................................................................12

Certain State Tax Considerations ....................................................................................................................................................14

Privacy Policy ..............................................................................................................................................................................................14

Creditor Protections ................................................................................................................................................................................15

Contract 2012-2013 ...............................................................................................................................................................................................15

Enrollment Form ........................................................................................................................................................................Center of Booklet

This Disclosure Statement, including the Contract, contains important information you should review before opening anAccount in the Maryland Prepaid College Trust. You will find summary information under Frequently Asked Questions that isdescribed in more detail throughout the Disclosure Statement, including information about the benefits and risks of investing.Please read it carefully and save it for future reference. Definitions for many capitalized terms can be found in the Contractbeginning on page 15.

Section 529 plans offered by other states may offer tax or other benefits to taxpayers or residents of those states that are notavailable under the Maryland Prepaid College Trust. If you live outside of Maryland, you should consider any college savings

program offered by your home state or your Beneficiarys home state prior to making a decision to invest in the MarylandPrepaid College Trust. In addition, you should periodically assess, and if appropriate, adjust your Section 529 plan investmentchoices with your time horizon, risk tolerance and investment objectives in mind.

This Disclosure Statement is part of the College Savings Plans of Maryland Enrollment Kit. The EnrollmentKit consists of a Highlights Booklet and Disclosure Statements for the Maryland Prepaid College Trust andthe Maryland College Investment Plan, with accompanying Enrollment Forms. The Enrollment Kit has beenidentified by the College Savings Plans of Maryland as the Offering Materials intended to provide substantivedisclosure of the terms and conditions of an investment in the College Savings Plans of Maryland. TheEnrollment Kit is designed to comply with the Disclosure Principles Statement No. 5, adopted by the CollegeSavings Plans Network on May 3, 2011.

CollegeSavingsMD.org


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What is the Maryland Prepaid College Trust?

The Maryland Prepaid College Trust allows you to lock in futurecollege tuition at todays prices, and your Account may be used atnearly any college nationwide. You are also eligible for generousfederal and Maryland State tax benefits and the Prepaid CollegeTrust is backed by a Maryland Legislative Guarantee. The UniversityPlans can be purchased for one semester up to seven years, withno more than five years purchased on a single Account, or a moreaffordable Community College Plan can be purchased for one ortwo years. For more flexibility there is even a Two-Plus-Two Plan that

combines the first two years of the Community College Plan withtwo subsequent years of the University Plan.

Who can enroll?

The Prepaid College Trust is open to children from newbornthrough 12th grade. Accounts must be open for at least threeyears before tuition benefits can be paid.

Either you or the child must be a resident of Maryland or DC at thetime of enrollment and both must be a U.S. citizen or resident alien.

When can I enroll?

Your completed Enrollment Form and Enrollment Fee must becompleted online or postmarked no later than April 8, 2013 to beeligible for 2012-2013 prices. Enrollments are accepted outside of

an enrollment period for the following types of enrollments at pricesin effect when the enrollment is completed:

Newborn infants, who can be enrolled anytime during the yearfrom the date of their birth until their first birthday;

Purchase of additional semesters/years for a current Beneficiaryof a current Account Holder; or

A new Account if the same Account Holder and Beneficiary arecurrently enrolled in the Maryland College Investment Plan.

What are the fees associated with the Prepaid CollegeTrust?

The operating expenses of the Prepaid College Trust are coveredby 2.5% of Contract payments. In addition, each new Prepaid

College Trust Account is charged an Enrollment Fee. A completeSchedule of Fees can be found on page 7.

What will the Prepaid College Trust pay when my childattends college?

For the tuition plan you purchase, provided that your child(Beneficiary) enrolls in college as at least a half-time student;at least three years have passed since his or her enrollment inthe Prepaid College Trust; and all payments have been satisfiedon the Account:

If your Beneficiary attends a Maryland public college, thePrepaid College Trust will pay the full in-state or in-county

tuition and mandatory fees (Tuition) at that college or yourMinimum Benefit, whichever is greater.

If your Beneficiary attends a private or out-of-state college, thPrepaid College Trust will pay Tuition up to either the WeighteAverage Tuition or your Minimum Benefit, whichever is greaterYou would then have to make up any difference.

What is the Weighted Average Tuition?

The Weighted Average Tuition is the in-state or in-county Tuitionat each Maryland public college times the number of full-timeequivalent in-state or in-county students enrolled at that college,added together. This total is then divided by the number of full-timequivalent in-state or in-county students enrolled at all Marylandpublic colleges. There is a separate calculation for the four-year

public colleges and the two-year public community colleges inMaryland. The Board calculates the Weighted Average Tuition onceach year, typically in the fall for the following year, by applyingits projected increase for tuition and mandatory fees, as usedto determine Contract prices, to the current years WeightedAverage Tuition. The Weighted Average Tuitions for the 2013-201Academic Year are $8,900 for the four-year public colleges and$4,132 for the community colleges.

How do my payments compare with projected futureTuition?

The chart below demonstrates how your payments for the four-year University Plan compare to our projected cost of four yearsof the Weighted Average Tuition when your Beneficiary reachescollege age. For example, if your Beneficiary is in Kindergarten,

using the Extended Monthly Payment Option, your total paymentsto the Prepaid College Trust for four years of university Tuitionwill be $63,504 ($441 per month for 144 months). This is 65%of our anticipated 4 years of Tuition cost beginning in 2025, yourKindergarteners projected freshman year of college, which is$98,087.

FREQUENTLY ASKED QUESTIONS

888.4MD.GRA

5-Year Monthly5-Year Monthly

Projected WeightedAverage TuitionProjected WeightedAverage Tuition

Extended MonthlyExtended Monthly

Lump SumLump Sum

4-Year University Contract Costs vs. Projected Weighted Average Tuition

AnnualAnnual

InfantKindergarten4th grade8th grade

$53,738

$72,514

$98,087

$143,603$150,000

$140,000

$130,000

$120,000

$110,000

$100,000

$90,000

$80,000

$70,000

$60,000

$50,000

$40,000

$30,000

$20,000

$10,000

0

Projected Weighted

Average Tuition Growth is

for illustrative purposes

only. Actual Weighted

Average Tuition growth

may be higher or lower

than projected.


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Is there a minimum amount the Plan will pay?

Yes. Your Minimum Benefit is defined as the payments you make,plus a reasonable rate of return. This rate is equal to a monthly rateof return of a U.S. Government Security with a constant maturity ofone year minus 1.2%, but will never be less than zero. However,this rate has been zero since October 2008.

In the event that Tuition is less than your Minimum Benefit, youmay use the difference for other Qualified Education Expenses(as defined on page 16) such as room & board and books. SeeMinimum Benefits in Article IVof the Contract for a complete

description.How does the Legislative Guarantee work?

In the event that the Trust ever experiences a financial shortfall,Maryland law requires the Governor to include funds in the Statebudget to allow the Trust to pay your full Benefits. As with the entireState budget, the Maryland General Assembly has final approval.For additional information, please see the section titled PrepaidCollege Trust Operations on page 10.

How does the State income deduction work for thePrepaid College Trust?

Maryland taxpayers receive a maximum $2,500 deduction from theirState adjusted gross income annually per Account for contributionsto the Prepaid College Trust. The Account Holder is the onlyperson who can take advantage of the Maryland State incomededuction for contributions he or she has made. Contributionsmade in excess of $2,500 per Account in a single year may becarried forward and deducted from your State adjusted grossincome in consecutive future years until the full amount contributedto the Account has been deducted, subject to the $2,500 annuallimit. For additional information, see the section titled Certain StateTax Considerations on page 14.

Can there be two Account Holders on an Account?

No. Only one person can be named as the Account Holder whenyou enroll a Beneficiary. Only the Account Holder can makedecisions regarding the Account such as choosing a paymentoption, changing Beneficiaries, claiming Benefits, etc. However, the

Account Holder may designate another person in writing who mayrequest or receive information regarding the Account.

Am I allowed to have both a Prepaid College Trust Accountand another 529 Account such as the Maryland CollegeInvestment Plan?

Yes. Complementary college savings options may be beneficialfor families seeking a diversified college savings portfolio with aninvestment in the Prepaid College Trust and an investment like theCollege Investment Plan.

Can I change my payment option or pay off my Accountearly?

Yes. You can change your payment option at any time for a nominal

administrative fee (see Schedule of Fees on page 7). You mayalso pay off your Account at any time. Payoff amounts will be lessthan your original total Contract payments and are available byaccessing your Account on our website or by contacting our office.

You may accelerate your payments in either of the following ways:

1) Pay more than your monthly or annual payment amount. This maylessen the number of monthly or annual payments you will have tomake. This will not reduce the total amount of your payments.

2) Reduce the total amount of your payments by making a singlepayment of at least 25% of the payoff amount.

How do I make my payments?

Payments must be made by check, money order, electronic fundstransfer or payroll deduction. You may move assets from an UGMUTMA or a Coverdell Education Savings account, redeem qualifieU.S. Savings Bonds or liquidate other investments to make yourpayments. Special rules and tax consequences may apply tothese types of payments. You should consult your tax advisor foradditional information on making payments using funds liquidatedfrom other investment accounts. See Article VIII - Substitutions othe Contract.

Does the Prepaid College Trust send me an Accountstatement?

The Prepaid College Trust sends an Annual Statement of Accountfor each Account during the first quarter of the year. It will showyour payments and any Benefits that have been paid on theAccount. At any time, however, you may view your Account on ouwebsite or call our office to request an Account statement.

How much has Tuition increased in the past?

Tuition increases from 2002-2012 at four of the larger Marylandpublic colleges are:

University of Maryland College Park 54%University of Maryland Baltimore County 46%Towson University 48%Salisbury University 60%

Nearly two-thirds of students who are currently attending collegeand using their Prepaid College Trust Accounts are attendingprivate or out-of-state colleges. Tuition increases from 2002-2012at four of the private and out-of-state colleges that are frequentlyattended by our students are:

James Madison University* 96%Stevenson University 98%Penn State University* 61%University of Delaware* 88%

*Non-resident Tuition increases

What if my Beneficiary delays college attendance?A Beneficiary has up to 10 years after his/her projected year ofcollege enrollment to begin to use Benefits. In addition, any yearsspent in active U.S. military service are added to the 10-year limit.



17/693

COMMUNITY COLLEGE PLAN 1 YEAR

Annual Payments Extended Monthly PaymentsGrade/Age Projected Lump Sum _________________________ 5-year Monthly _________________________

9/1/12 Enrollment/ Payment Amount Number Payment Amount NumberInitial Eligibility

9-12 2016 $4,704 $1,687 3 N/A $149 36

8 2017 4,666 1,673 3 N/A 116 48

7 2018 4,630 1,660 3 $97 97 60

6 2019 4,594 1,648 3 96 82 72

5 2020 4,560 1,635 3 96 74 84

4 2021 4,527 1,623 3 95 67 96

3 2022 4,495 1,613 3 94 62 108

2 2023 4,464 1,601 3 94 57 120

1 2024 4,434 1,590 3 93 54 132

K 2025 4,407 1,581 3 93 50 144

4 2026 4,380 1,571 3 92 47 156

3 2027 4,354 1,561 3 92 45 168

2 2028 4,328 1,553 3 91 44 180

1 2029 4,305 1,545 3 91 42 192

Infant 2030 4,283 1,536 3 90 41 204

The following tables provide 2012-2013 Enrollment Periodcontract prices. To determine a price, decide which tuitionplan you want, then find the Beneficiarys grade or age andprojected enrollment year (or earliest year he/she is eligible touse Benefits) on the left-hand side of the chart. For example, ifthe Beneficiary will be in the 9th grade during the 2012-2013school year, the projected year of college enrollment will be2016. For Beneficiaries in the 10th-12th grades, the earliestyear they are entitled to use Benefits will be 2016. For furtherinformation, see Minimum Maturityin Article IVof theContract.Next, the columns moving across the chart will provide youwith the prices and number of payments for different payment

options: lump sum, annual, five-year monthly, and extendedmonthly. If you would like to use the down payment option,please see page 8 as an example. The down payment optionsfor all tuition plans and additional contract price options areposted on our website or available by calling our toll-freenumber. The monthly and annual payment prices include a7.5% interest component. If you enroll during the 2012-2013Enrollment Period, your first payment will be due August 1,2013. If you choose the down payment option, your firstpayment and the down payment are both due August 1, 2013

PRICES AND FEES

All prices are based on several factors; for a full list of these factors, seeContract Pricing on page 12 of this Disclosu

Statement. If you wish to take advantage of the Maryland State income deduction for the 2012 tax year, your complete

2012-2013 Enrollment Form and a payment must be completed electronically or postmarked by December 31, 2012.

888.4MD.GRA


18/694

COMMUNITY COLLEGE PLAN 2 YEARS



9-12 2016 $9,370 $3,356 3 N/A $294 36

8 2017 9,296 3,329 3 N/A 228 48

7 2018 9,224 3,303 3 $187 187 60

6 2019 9,155 3,278 3 186 162 72

5 2020 9,087 3,255 3 185 143 84

4 2021 9,022 3,231 3 183 129 96

3 2022 8,959 3,209 3 182 117 108

2 2023 8,899 3,188 3 181 109 120

1 2024 8,842 3,167 3 180 102 132

K 2025 8,786 3,147 3 178 97 1444 2026 8,733 3,128 3 178 92 156

3 2027 8,682 3,110 3 177 87 168

2 2028 8,633 3,092 3 176 83 180

1 2029 8,588 3,077 3 175 80 192

Infant 2030 8,544 3,061 3 174 78 204

UNIVERSITY PLAN 1 SEMESTER



9-12 2016 $5,528 $1,982 3 N/A $176 36

8 2017 5,498 1,971 3 N/A 136 48

7 2018 5,469 1,961 3 $113 113 60

6 2019 5,443 1,952 3 112 98 72

5 2020 5,418 1,943 3 112 87 84

4 2021 5,394 1,933 3 111 78 96

3 2022 5,372 1,926 3 111 73 108

2 2023 5,351 1,919 3 111 68 120

1 2024 5,332 1,912 3 110 63 132

K 2025 5,314 1,906 3 110 60 1444 2026 5,298 1,899 3 110 57 156

3 2027 5,284 1,895 3 109 55 168

2 2028 5,272 1,890 3 109 53 180

1 2029 5,259 1,885 3 109 52 192

Infant 2030 5,250 1,882 3 109 49 204



19/695

UNIVERSITY PLAN 1 YEAR



9-12 2016 $10,892 $3,901 3 N/A $341 36

8 2017 10,834 3,880 3 N/A 265 48

7 2018 10,777 3,859 3 $219 219 60

6 2019 10,724 3,840 3 217 188 72

5 2020 10,674 3,823 3 216 167 84

4 2021 10,629 3,806 3 216 151 96

3 2022 10,584 3,790 3 215 138 108

2 2023 10,544 3,776 3 214 129 120

1 2024 10,506 3,762 3 213 122 132

K 2025 10,471 3,750 3 213 114 1444 2026 10,440 3,739 3 212 108 156

3 2027 10,411 3,729 3 212 104 168

2 2028 10,387 3,719 3 211 100 180

1 2029 10,364 3,712 3 211 97 192

Infant 2030 10,344 3,704 3 210 94 204

UNIVERSITY PLAN 2 YEARS



9-12 2016 $21,726 $7,775 3 N/A $676 36

8 2017 21,610 6,006 4 N/A 524 48

7 2018 21,502 4,948 5 $433 433 60

6 2019 21,399 4,246 6 431 372 72

5 2020 21,302 3,746 7 428 329 84

4 2021 21,212 3,373 8 426 297 96

3 2022 21,127 3,085 9 425 272 108

2 2023 21,049 3,075 9 423 252 120

1 2024 20,977 3,063 9 422 237 132

K 2025 20,911 3,054 9 420 224 1444 2026 20,851 3,046 9 419 212 156

3 2027 20,798 3,036 9 418 204 168

2 2028 20,749 3,030 9 417 195 180

1 2029 20,709 3,024 9 417 188 192

Infant 2030 20,674 3,019 9 417 183 204

888.4MD.GRA


20/69


21/697

Schedule Of Fees

Enrollment Fee Must be received before Account can be opened

New Account opened online $50

New Account opened using paper enrollment form $75

New Account opened online or by using the paper form if same Account Holder and $20

Beneficiary have an account in the Maryland College Investment Plan

Purchase of Additional Semesters or Years Same Account Holder and Beneficiary $20

Rollover Fee For rollover to another 529 plan (except the Maryland College Investment Plan) $75

Rollover Fee For rollover to the Maryland College Investment Plan $20

Returned Check Fee $28

Late Fee on Monthly Payment (1) $10 per month

Late Fee on Lump Sum Payment (1) $5 per day

Late Fee on Annual Payment (1) $40 per month

Change of Account Holder (2) $10

Change of Beneficiary (2, 3) - Prior to start of claiming Benefits on the Account:

New Beneficiary is not currently enrolled in the Maryland Prepaid College Trust $75

New Beneficiary is currently enrolled in the Prepaid College Trust $10

Change of Beneficiary (2,3) - After any Benefits have been claimed on the Account $25

Change of Tuition Plan (3) $10

Change in Payment Option (3) $25

Account Cancellation Fee if account is canceled due to a reduced refund (4) $75Account Cancellation Fee due to misrepresentation or fraud Lesser of $500 or payments to date

Document Replacement Fee $10

(1) If payment is received more than 15 days past the due date.

(2) These fees are waived in case of death or Disability.

(3) These fees do not cover possible increases in Contract payments.

(4) This fee is waived in cases of Unused Benefits.

The operating expenses of the Trust are funded by: (1) 2.5% of all Contract payments; and (2) a $4 payment processing fee,which has been included in each scheduled payment stated in the Price Charts.

All Fees are subject to change upon Board approval. Maryland law requires that all Fees collected by the Prepaid College

Trust be used to administer the Prepaid College Trust.

TWO-PLUS-TWO PLAN 4 YEARS



9-12 2016 $30,954 $11,078 3 N/A $961 36

8 2017 30,777 8,552 4 N/A 744 48

7 2018 30,609 7,042 5 $614 614 60

6 2019 30,449 6,039 6 611 527 72

5 2020 30,296 5,325 7 608 466 844 2021 30,154 4,794 8 605 421 96

3 2022 30,019 4,383 9 603 384 108

2 2023 29,894 4,055 10 599 356 120

1 2024 29,774 3,790 11 597 335 132

K 2025 29,666 3,572 12 595 315 144

4 2026 29,565 3,389 13 593 300 156

3 2027 29,473 3,234 14 591 286 168

2 2028 29,383 3,100 15 589 275 180

1 2029 29,295 2,985 16 587 265 192

Infant 2030 29,216 2,885 17 586 256 204

888.4MD.GRA


22/698

DOWNPAYMENTOPTIONSFORUNIVERSITYPLAN4YEARS

Down

Paymen

t

Annua

lPaymen

ts

5-year

Mon

thlyPaymen

ts

E

xten

de

dMon

thlyPaymen

ts

Grade/Age

Projected

LumpSum

________________________

______________________________

____________________

___

_______________________

9/1/12

Enrollment

Payment

25%

40%

55%

25%

40%

55%

Number

25%

40%

55%

25%

40%

55%

Number

9-12

2016

$43,227

$10,807

$17,291

$23,775

$

11,602

$9,282

$6,963

3

N/A

N/A

N/A

$1,006

$806

$605

36

8

2017

43,010

10,753

17,204

23,656

8,964

7,172

5,380

4

N/A

N/A

N/A

780

624

469

48

7

2018

42,8

05

10,7

01

17,1

22

23,5

43

7,3

86

5,9

10

4,4

33

5

$644

$516

$388

644

516

388

60

6

2019

42,6

11

10,6

53

17,0

44

23,4

36

6,3

39

5,0

72

3,8

05

6

641

513

386

553

443

333

72

5

2020

42,4

30

10,6

08

16,9

72

23,3

37

5,5

93

4,4

75

3,3

57

7

639

512

385

489

392

295

84

4

2021

42,2

62

10,5

66

16,9

05

23,2

44

5,0

39

4,0

32

3,0

25

8

636

510

383

441

354

266

96

3

2022

42,1

04

10,5

26

16,8

42

23,1

57

4,6

09

3,6

88

2,7

67

9

633

507

382

405

324

244

108

2

2023

41,9

60

10,4

90

16,7

84

23,0

78

4,2

70

3,4

17

2,5

64

10

630

505

380

376

302

227

120

1

2024

41,8

28

10,4

57

16,7

31

23,0

05

3,9

93

3,1

95

2,3

98

11

629

504

379

353

283

213

132

K

2025

41,7

08

10,4

27

16,6

83

22,9

39

3,7

66

3,0

14

2,2

61

12

627

502

378

332

266

201

144

4

2026

41,6

01

10,4

00

16,6

40

22,8

81

3,5

76

2,8

62

2,1

47

13

625

501

377

316

254

191

156

3

2027

41,5

06

10,3

77

16,6

02

22,8

28

3,4

16

2,7

33

2,0

51

14

624

500

376

303

243

183

168

2

2028

41,4

24

10,3

56

16,5

70

22,7

83

3,2

78

2,6

23

1,9

68

15

623

499

375

290

233

175

180

1

2029

41,3

55

10,3

39

16,5

42

22,7

45

3,1

60

2,5

29

1,8

98

16

622

498

375

281

225

170

192

Infant

2030

41,2

98

10,3

25

16,5

19

22,7

14

3,0

58

2,4

47

1,8

36

17

621

498

374

272

218

165

204

P

leaserememberthatthedownpaymentandthefirstsubsequentpaym

entarebothdueAugust1,

2013.

T

heDownPaymentOptionisavailab

leforALLtuitionplans.

Pleasevisit

ourwebsiteatCollegeSavingsMD

.orgorcallusat888.4MD.GRAD

(463.4723)todetermine

t

hedownpaymentamountsforadifferentTuitionPlan.



23/69

Last Name First NamesuFFix m.1. 9 m. 2. 9 m. 3. 9 m 4. 9 m.

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resideNt aLieNu.s. CitiZeN

- -

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Maryland PrePaid College TrusT

20122013 Enrollment Form

incon

Type Non-Refundable Fee Deadline

Nw: No current Account includes payment by $75 ($50 online) Complete online or postmark no later than apl 8, 201Rollover from other 529 plans (except Maryland CollegeInvestment Plan)

Nwbon: Infant under 1 year of age $75 accp -on until the childs first birthdayat prices in effect at time of enrollment

rollov: No current Account includes payment $20 Complete online or postmark no later than apl 8, 201by Rollover from College Investment Plan

Oh: (1) Purchase of additional semesters/years for $20 accp -on at prices in effect at timecurrent Account Holder and Beneficiary; or of enrollment

(2) New Account if same Account Holder and Beneficiaryare currently enrolled in the College Investment Plan

Please enclose a check or money order for the non-fnbl enrollment fee, made payable to the mln Pp Coll t.Mail this completed and signed form to: MPCT, P. O. Box 17591, Baltimore, MD 21297-1591 and allow 4 6 weeks for processing.If you need assistance in completing this form, please call 888.4md.grad (463.4723).

resideNt aLieu.s. CitiZeN

i h accon Hol mln o dC n? 9 y 9 N


24/69

F O r O F F i C e u s e O N L y $75.00 / $20.00 ___________ amOuNt ___________ CHeCK # ___________ BatCH #

mho of Pn reQuired FOr mONtHLy PaymeNt OPtiONs ONLy

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(1) Wh o h bo h Po? (Chck onl on)

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down Pn & annl Pn* 9 25% 9 40% 9 55%down Pn & 5-y monhl Pn* 9 25% 9 40% 9 55%down Pn & en monhl Pn* 9 25% 9 40% 9 55%* to lc h own pn opon, chck h pcn h o wh o k on h ln h

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If signing as a Trustee, attach a copy of the trust agreement pages with the trust name and date, the trustee(s) name(s) and the signature page. For a corporation orother entity, attach a copy of the corporate resolution, bylaws, or charter that lists the person(s) authorized to act for the organization.

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resideNtiaL address (incl nb, , n pnno P.O. Bo)

trust, OrgaNiZatiON Or OtHer eNtity (if accon Hol scco no n nvl)

date OF BirtH

monh d y

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25/69

Risk FactorsInvestments May Not Meet Objectives; Accounts Are NotInsured. As with any investment, the rates of return and theamount of appreciation and depreciation of the Prepaid CollegeTrusts investments are unpredictable. Therefore, we cannot provideany assurance that the investments selected by the Board will meettheir objectives. Also, the Boards investments are not deposits orobligations of, or guaranteed by, any depository institution and are

not insured by the Federal Deposit Insurance Corporation (FDIC),Federal Reserve, the State of Maryland or any other governmentagency.

Market Uncertainties. Due to market uncertainties, the overallmarket value of the Prepaid College Trust is likely to be highlyvolatile and could be subject to wide fluctuations in responseto factors such as regulatory or legislative changes, worldwidepolitical uncertainties, and general economic conditions, includinginflation and unemployment rates. All of these factors are beyondour control and may cause the overall value of the Prepaid CollegeTrust to decrease, regardless of our performance or your selectionof tuition plan. Any decrease in value could result in an actual oractuarial (unrealized) loss to the Prepaid College Trust. See Trustand Legislative Guarantees on page 10.

Internal Revenue Service Regulations Not Final. As of thedate of this Disclosure Statement, the Internal Revenue Service(IRS) has not issued final tax regulations regarding programssatisfying the requirements of Section 529 of the Internal RevenueCode (Qualified Tuition Programs). In addition, the Prepaid CollegeTrust has not sought nor has it received a private letter ruling fromthe IRS regarding the status of the Prepaid College Trust underSection 529 of the Internal Revenue Code. The Board may, in itssole discretion, determine to seek such a ruling in the future.

Discretion of the Board. Neither you nor your Beneficiarymay direct the investment of any contribution to the PrepaidCollege Trust or any earnings in the Prepaid College Trust.The Board, as trustee of the Prepaid College Trust, has thesole discretion to determine how to invest payments made onContracts. As required by Maryland law, the Board has adopteda Comprehensive Investment Plan (Investment Plan) that outlinesits long-term investment goals for providing the funding of futureBenefits and the administration of the Prepaid College Trust.The Investment Plan currently directs the investment of Contractpayments into separately managed accounts, commingled funds,limited partnerships, and mutual funds. The Board may, in its solediscretion, determine to amend its Investment Plan at any time,including investing in other asset types and by using additionalmanagers to further diversify its investments.

Effect of Future Law Changes. It is possible that futurechanges in federal or state laws or court rulings could adversely

affect Section 529 Plans generally, the terms and conditions ofthe Prepaid College Trust or your Benefits, even retroactively.Specifically, the Prepaid College Trust is subject to the provisionsof and any changes to or revocation of Education Article Title 18,Subtitle 19 and Tax Article, Title 10, Subtitle 2 of the MarylandAnnotated Code (Code) and Section 529 of the Internal RevenueCode. It is the Prepaid College Trusts intention to take advantageof Section 529; therefore, it is vulnerable to tax law changes orcourt or interpretive rulings that might alter the federal and/or Statetax considerations described in this Disclosure Statement.

Separately Managed Accounts. Maryland law allows the CollegeSavings Plans of Maryland to be exempt from State procurementlaw for the selection of separately managed accounts. While this

exemption is designed to reduce investmentmanagement fees andenhance net returns, there can be no assurance that the exemptionwill positively impact net returns.

Cost of Certain Payment Plans. Contract prices are determinebased on a number of factors. Specifically, total Contract paymenfor the monthly and annual payment options are more than thelump sum payment. This is because the monthly and annualpayment options take into account the fact that the Prepaid CollegTrust has a shorter amount of time to generate earnings on yourpayments. With monthly and annual payments, the Prepaid CollegTrust does not have the full purchase price available to investimmediately, so it cannot generate the same amount of income

as it would with a lump sum payment. As a result, you will pay agreater amount over time for your Benefits than if you make a lumpsum payment. In addition, with any tuition plan, your payments matotal more than the Tuition currently charged by Maryland publiccolleges.

Refunds and Reduced Refunds. Reduced refunds arecalculated based on the amount of time your Contract has been inexistence and may be net of investment losses and administrativefees associated with your payments on the Contract. See ArticleVIIof the Contract. In addition, in cases of financial detriment tothe Prepaid College Trust, the Board reserves the right to delaya refund for a period of time not to exceed one year. To date, theBoard has not delayed any refund or reduced refund payments.

Rebates. The Board has the option to rebate excess InvestmentEarnings (defined in the Contract) to Prepaid College Trustparticipants. By law, rebates would only take place under certaincircumstances to ensure the soundness of the Trust. These are:1) the actuarial surplus is at least 30%; 2) the Trust has notreceived a loan under the terms of the Legislative Guarantee in thepast five years; and 3) if the Trust has received a loan under theterms of the Legislative Guarantee, the Trust has repaid the State.Any rebate would be an amount determined solely by the Board.The Prepaid College Trust is currently not eligible for a rebate, andthere can be no assurance that, if the conditions listed above aremet, the Board would elect to offer such a rebate.

Tax Considerations. The federal and state tax consequences

associated with participating in the Prepaid College Trust can becomplex. You should consult a tax advisor regarding the applicatioof tax laws to your particular circumstances. See Certain FederalTax Considerations starting on page 12 and Certain State TaxConsiderations on page 14.

Securities Law Considerations. Contracts between you andthe Board may be considered securities. These Contracts will notbe registered as securities, based in part on assurances receivedby the Board from the staff of the Securities and ExchangeCommission that it would not recommend enforcement action if thContracts were not registered. Prepaid College Trust Contractshave not been registered with the securities regulatory authoritiesof any state. In addition, neither the Contracts nor the Trust havebeen registered as investment companies under the InvestmentCompany Act of 1940. Accounts are therefore not subject toFinancial Industry Regulatory Authority oversight.

Death of Account Holder. If an Account Holders Successorhas not been named on an Account and the Account Holder dies,control and ownership of the Account will become subject to theestate laws of the state in which the Account Holder resided. If anAccount Holders Successor is a minor at the time of the AccountHolders death, then a Custodian must be named by the minorsparent or guardian.

Death of an Account Holders Successor. In the event theAccount Holders Successor predeceases the Account Holder anthe Account Holder fails to designate another Account Holders

Successor or the Account Holder and Account Holders Successdie simultaneously, control and ownership of the Account, upon th

OPERATIONS AND ADDITIONAL INFORMATION

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Account Holders death, will become subject to the estate laws ofthe state in which the Account Holder resided.

Simultaneous Death of Account Holder and Beneficiary. Ifthe Account Holder and Beneficiary on an Account both die andthere is no evidence to verify that one died before the other, anyappointed Account Holders Successor shall become the AccountHolder and must designate a new Beneficiary or close the Account.If no Account Holders Successor has been appointed, the fiduciaryresponsible for the disposition of the Beneficiarys estate willdesignate the new Account Holder. If no executor or fiduciary hasbeen appointed, one must be appointed by a valid court order forthis purpose.

Release of Custodian. For custodial accounts not funded byUGMA/UTMA, the Custodian will no longer have the authority toact on the Account once the Account Holder reaches the age ofmajority. See Article VIIIof the Contract for additional information.

Relationship to Financial Aid. A Beneficiary may wish toparticipate in federal, state, or institutional loan, grant, or otherprograms for funding higher education. Assets in the PrepaidCollege Trust or another 529 plan would typically be included onthe Free Application for Federal Student Aid (FAFSA) form as aparental asset, which is assessed at a lower rate than a studentsasset would be when determining a familys expected contribution.

To determine the impact of an investment in the Prepaid CollegeTrust on need-based financial aid programs, you and/or yourBeneficiary should check the applicable laws or regulationsconcerning financial aid and consult with your tax advisor. Since thetreatment of Account assets under any such need-based programmay vary by school, you and/or your Beneficiary should also checkwith the financial aid office of an Eligible Institution.

Relationship of Your Account to Medicaid Eligibility. Itis unclear how local and state government agencies will treatQualified Tuition Program assets for the purpose of Medicaideligibility. Although there are federal guidelines under Title XIX ofthe Social Security Act of 1965, each state administers its ownMedicaid program and rules could vary greatly from one state tothe next. You should consult with an attorney, a tax advisor, or your

local Medicaid administrator regarding the impact of an investmentin the Prepaid College Trust on Medicaid eligibility.

Prepaid College Trust OperationsContracts. A valid Contract consists of a completed 2012-2013Enrollment Form, the Schedule of Prices and Fees, the Certificateof Tuition Benefits, the Highlights Booklet, and the Prepaid CollegeTrust Disclosure Statement. The Contract creates an obligation forthe Prepaid College Trust to pay Benefits according to the terms ofthe Contract provided that you have made scheduled payments.

Trust and Legislative Guarantees. Payment of Benefits isguaranteed by the Prepaid College Trust. In addition, Maryland lawprovides that in the event that funds in the Prepaid College Trust

are insufficient to pay full Benefits in any given year, the Governor isrequired to include an amount in the following years State budgetto fully pay Benefits. As with the entire State budget, the MarylandGeneral Assembly determines the final amount of the appropriation.If the Maryland General Assembly does not fully fund the budgetrequest, the Board may adjust the terms of subsequent or currentContracts to ensure continued actuarial soundness of the PrepaidCollege Trust. Subject to the rights of the Account Holders, anyamount paid to the Prepaid College Trust from the State mustbe repaid to the State without interest in equal amounts over thefollowing two fiscal years.

Status of Trust Funds. Funds in the Prepaid College Trust are notconsidered monies of the State and may not be deposited into theGeneral Fund of the State. Funds remaining in the Prepaid College

Trust at the end of any fiscal year remain in the Prepaid CollegeTrust.

Contract Prices. Contract prices are determined for eachEnrollment Period. To do so, the Board consults with its actuary,currently Gabriel Roeder Smith & Company, who provided anannual soundness valuation. The Board uses the results of its morecent soundness valuation and the most recent tuition trendsat Maryland Public Colleges to select projections to be used incalculating Contract prices for the next Enrollment Period.

Payments into the Prepaid College Trust. The Prepaid Colleg

Trust is not a savings account. It is a fund that pools your paymenand invests them in accordance with its Investment Plan. TheInvestment Earnings generated on these investments make up thedifference between your payments and expected future Tuitioncosts. Payments you make are deposited into the Prepaid CollegeTrusts operating account. The operating account is maintained bySunTrust Bank and is fully insured. The Board uses the funds inthis account to purchase investments and to pay Benefits, refundsrollovers, and the Prepaid College Trusts operating costs, in thatorder. Separate accounting records are kept for each AccountHolder. These records include payments, fees charged and paid,and Benefits or refunds paid.

Plan Governance and Administration

The College Savings Plans of Maryland. The Maryland GeneAssembly created the College Savings Plans of Maryland as anindependent State agency in 1997 to establish a Qualified TuitionProgram under Section 529 of the Internal Revenue Code. TheCollege Savings Plans of Marylands first Qualified Tuition Prograthe Prepaid College Trust, was also created by the GeneralAssembly in 1997 to provide families with an affordable, convenieway to pay in advance for the cost of college and reduce futurereliance on debt. Subject to the Governors approval, the GeneraAssembly may amend the 1997 statute that created the PrepaidCollege Trust by passing new legislation.

Legislative History. Bills amending the original legislation withrespect to the Prepaid College Trust have been introduced andpassed during the 1998, 1999, 2000, 2003, 2004, 2007 and2008 Legislative Sessions. These bills have significantly changedand enhanced the Prepaid College Trust by creating tax incentivefor Maryland Account Holders, expanding features, establishing aLegislative Guarantee for the Prepaid College Trust, changing thename of the agency administering the Prepaid College Trust to thCollege Savings Plans of Maryland, exempting the College SavingPlans of Maryland from State procurement laws with respect tothe selection of investment managers to invest the assets of thePrepaid College Trust in accordance with the Investment Plan(Exemption), and authorizing the Board to establish a broker-dealecollege investment plan.

The College Savings Plans of Maryland Board. Marylandlaw requires that the Prepaid College Trust be directed and

administered by the 10-member College Savings Plans of MarylanBoard including five ex-officio members. The ex-officio membersare the Maryland State Comptroller, the Maryland State Treasurerthe Secretary of the Maryland Higher Education Commission, theMaryland State Superintendent of Schools and the Chancellor ofthe University System of Maryland. The five remaining members arappointed by the Governor from the private sector. The appointedBoard members must have significant experience in finance,accounting, investment management, or other areas that can be oassistance to the Board. Board members receive no compensatiofor their services to the College Savings Plans of Maryland;however, they are entitled to reimbursement for expenses incurredin the performance of their duties. There may be vacancies on theBoard from time to time.



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Navellier & Associates, Inc. for domestic large capitalizationgrowth equity. This separately managed account invests incompanies that exhibit the ability to grow revenues and earningsover the long term at rates higher than the market average.

Vanguard Institutional Index Fund for domestic largecapitalization core common stocks. This is an open-end mutualfund that is passively managed and maintains a portfolio ofessentially all of the 500 stocks that make up the Standard &Poors 500 Index.

Rainier Investment Management Inc. for domestic small/mid

capitalization growth equity. The investment objective of thisseparately managed account is the long-term growth of capitalthrough investments in growing small and mid-size companies.

Thompson, Siegel & Walmsley for domestic small capitalizationvalue equity. This separately managed account is actively managedto invest in companies that appear to be temporarily undervalued bythe stock market but have a favorable outlook for long-term growth.

Delaware Pooled Trust - International Equity for internationalequity. This is an actively managed mutual fund that invests in foreigncompanies in developed countries, with limited exposure in emergingcountries that are expected to produce above-average returns overthe long-term future.

Aberdeen Asset Management for global emerging marketsequity. This actively managed fund aims to provide long termcapital growth from direct or indirect investments in emergingstock markets worldwide or companies with significant activitiesin emerging markets.

Vanguard Institutional Emerging Markets Stock IndexFund for international equity in emerging markets. This is apassively managed mutual fund that seeks to track theperformance of the MSCI Emerging Markets Index.

CBRE Clarion Securities for investments in global real estate.This separately managed account invests in securities of realestate companies or trusts listed on stock exchanges in NorthAmerica, Europe, Asia Pacific and selected emerging markets.

Morgan Stanley Global Real Estate Portfolio for investmentsin global real estate. This is an actively managed mutual fund thatseeks a combination of current income and capital appreciationby investing primarily in equity securities of companies in the realestate industry located throughout the world, but primarily locatedin the developed countries of North America, Europe and Asia.

Franklin Templeton Emerging Markets Debt OpportunitiesFund for emerging markets fixed income. The investmentobjective of this fund is to achieve high total return by investingin listed and unlisted debt obligations of sovereign and sub-sovereign issuers located in emerging markets. The fund investsin both hard and local currency denominated instruments.

Income Research & Management for core and short-termdomestic bonds. The assets of these separately managedaccounts primarily consist of a diversified set of investment-gradebonds across various sectors including corporate bonds,securitized holdings, and government securities.

Performance Information

Performance information for investments in the Prepaid CollegeTrust is published each year in the College Savings Plans ofMarylands Annual Report. The most recent report is available onour website. An Annual Report Summary is also mailed annually toeach Account Holder.

Rate of Return on Prepaid College Trust Investmentsas of June 30, 2012

One Year1.6%

Three Year11.9%

Five Year1.0%

Ten Year5.5%

SinceInception*

4.3%

*Date of inception is September 1, 1998, the first payment datunder the Prepaid College Trust.

Returns are net of all investment fees. Please keep in mind thatpast performance is not necessarily indicative of future results.

Contract Pricing

The factors and projections we use to determine Contract pricesfor this enrollment period include:

2012-2013 tuition at Maryland Public Colleges;

Projected tuition increases of 7% in each Academic Year;

Projected annual mandatory fee increases of 10% in eachAcademic Year;

Projected annual earnings of 7.5% on Prepaid College Trustinvestments;

Age of the Beneficiary;

Tuition plan selected;

Payment option selected;

2.5% of Contract payments to pay for the operating expensesof the Trust;

$4 payment processing fee for each scheduled payment;

Projected number of new Contracts in each Enrollment Perio

A load of 3.5% for the University tuition plans and 3.2% for thCommunity College tuition plans to support the actuarialsoundness of the Trust.

Following an analysis, calculation, and evaluation of these and othfactors, the Board then determines Contract prices for each tuitioplan and payment option.

Certain Federal Tax Considerations

General. This section takes a closer look at some of thefederal tax considerations you should be aware of wheninvesting in the Prepaid College Trust. The federal taxconsequences associated with an investment in the PrepaidCollege Trust can be complex. Please keep in mind that theIRS has issued only proposed regulations under Section529 of the Code; final regulations could affect the taxconsiderations mentioned in this section or require the termsof the Prepaid College Trust to change. In addition, the PrepaCollege Trust has not requested a private letter ruling fromthe IRS with regard to the status of the Prepaid College Trustunder Section 529 of the Code. The Board may, in its sole

discretion, apply for such a ruling from the IRS.This discussion is by no means exhaustive and is not meant astax advice. It has not been written to be used and cannot beused by any taxpayer for the purpose of avoiding penalties thamay be imposed on the taxpayer. This information was writtensolely to support the promotion and marketing of the PrepaidCollege Trust. You should consult a tax advisor regarding theapplication of federal tax laws to your particular circumstances

Earnings. Any earnings on your payments are tax-deferred,which means your Account assets grow free of current federaincome tax. When a Benefit is paid for Qualified EducationExpenses (as defined in the Contract), your Accountsinvestment gains are distributed federally income tax-free,provided you do not also claim all or part of these Qualified



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Account has the same Beneficiary as the Coverdell EducationSavings Account. Currently, the maximum annual contribution toCoverdell Education Savings Accounts is $2,000, and unlessCongress takes additional action, will be $500 beginning in2013. In addition, under current federal law, beginning in 2013,a 6% excise tax will apply to contributions made to a CoverdellEducation Savings Account in the same year as a contributionto a Qualified Tuition Program for the same Beneficiary. Consultyour tax advisor for more information.

Education Tax Credits. You and your Beneficiary, if eligible,can take advantage of Hope and Lifetime Learning Tax Creditswithout affecting your participation in the Prepaid College Trustor your Benefit. Hope and Lifetime Learning Credits can beclaimed in the same year that a tax-exempt distribution is takenfrom a Qualified Tuition Program provided the distribution is notused for the same educational expenses. Federally institutedguidelines (including income range and the students year incollege) govern who can take advantage of these credits.

More information may be found in the IRS Publication 970, whichcan be viewed online at www.irs.gov.

Certain State Tax ConsiderationsGeneral. This section takes a closer look at some of the statetax considerations you should be aware of when investing in

the Prepaid College Trust. However, the discussion is by nomeans exhaustive and is not meant as tax advice. The statetax consequences of an investment in the Prepaid CollegeTrust can be complex. You should consult your tax advisorregarding the application of state tax laws to your particularcircumstances.

Maryland State Income Deduction for Contributions.Maryland taxpayers receive a maximum annual deduction of$2,500 per Account on their Maryland tax return. The AccountHolder may take any amount disallowed in one year as adeduction in succeeding taxable years until the full amountcontributed to the Account has been deducted, subject to the$2,500 annual limit. Although individuals other than the Account

Holder may make contributions to an Account, only an AccountHolder may take the annual deduction and, only on amountscontributed by the Account Holder. Please note that yourAccount statements are not tax documents and should not besubmitted with your tax forms.

For additional information on Prepaid College Trust tax benefitsfor Maryland taxpayers, please refer to Maryland Income TaxAdministrative Release No. 32, which can be obtained atwww.marylandtaxes.com or by calling 1-800-MD-TAXES.To take advantage of the income deduction for 2012, yourcontribution needs to be completed online or postmarkedby December 31, 2012. You are responsible for maintainingdocumentation to support the timing of your contribution.

Maryland State Taxation of Benefits. The amount of yourBenefit that represents an investment gain is Maryland tax-free.

Maryland Taxation of Other Distributions/Recapture ofPrevious Deductions. When money is distributed from anAccount and not used to pay Qualified Education Expenses,even if that distribution was the result of the Beneficiarysreceipt of a Scholarship, grant, or tuition remission or theBeneficiarys death or Disability, any amounts previously takenas a deduction from Maryland adjusted gross income must beadded to your Maryland adjusted gross income for the tax yearin which you received the distribution.

Non-Maryland Residents. If you are not a Maryland resident,the amount of your Benefit that represents investment gain may

be subject to applicable state taxes. You should consult with

your tax advisor regarding the rules and the state tax benefits,any, available for your particular state. If you or your Beneficiarlive outside Maryland, you may also want to compare thecollege savings program offered by your state with the PrepaiCollege Trust.

Maryland Gift and Estate Taxes. Maryland law does notimpose gift taxes. Therefore, in the event that an Account Holdelects five-year averaging of contributions of up to $65,000in 2012 ($130,000 for married couples making the properelection), and dies prior to the end of the fifth year, a portionof the assets of the Account, while subject to federal gift tax,would not be subject to a Maryland gift tax. In the event that anAccount Holder elects five-year averaging of contributions ofup to $70,000 in 2013 ($140,000 for married couples makingthe proper election), and dies prior to the end of the fifth year, aportion of the assets of the Account, while subject to federal gtax, would not be subject to a Maryland gift tax.

Maryland l

Documents

Cspm Enrollment Kit