529 Contributions

• 529 Basic Information
• 529 Contributions
• 529 Withdrawals
• Financial Aid

Q: What happens to contributions over the maximum limit?
A: The servicing agent will not knowingly accept contributions in excess of the applicable limit. If, however, it is determined that contributions are made in excess of the applicable limit, the excess and any earnings (or less any loss) attributable to such excess will be promptly refunded and will be treated as a nonqualified withdrawal that may be subject to a 10% federal penalty tax, but no contingent deferred sales charge will be assessed by the servicing agent.¹

Q: How are my plan contributions invested?
A: Contributions to an account will be invested in the portfolio and share class that you choose. You may exchange shares within a given share class among the portfolios offered by the Trust once per calendar year and also upon a change in the beneficiary without penalty.

Enrollment Handbook page 6 "Each portfolio of the plan invests in Class A shares of the underlying AIM mutual funds without paying an initial sales charge.  The portfolios will invest in shares of the funds in accordance with an Investment Policy adopted for each portfolio by the Investment Council in consultation with the investment manager."

The plan consists of eight investment portfolios – three Allocation Portfolios and five Enrollment-Based Portfolios.  The Allocation Portfolios and the Enrollment-Based Portfolios each invest all of their assets in an underlying AIM Allocation Fund.  The AIM Allocation Funds are each a “fund of funds” that invest their assets in other underlying mutual funds advised by Invesco Aim Advisor, Inc. Each Asset Allocation fund seeks to meet its investment objective by building a portfolio of mutual funds investments that meet a target investment allocation between equity and fixed-income mutual funds.  Each Asset Allocation Fund’s performance depends on the investment performance of the underlying funds in which it invests.  Therefore, the risks of investing in the Asset Allocation Funds are the same as the risks associated with an investment in the underlying funds.

Allocation Portfolios

The Allocation Portfolios invest all of their assets in the AIM Allocation Fund you choose.  The underlying AIM Allocation Fund in which each Allocation Portfolio invests remains the same and does not change based on the age of the beneficiary.

Enrollment Based Portfolios

The Enrollment-Based Portfolios are a series of five investment portfolios that are designed to fit particular investment time horizons.  The Enrollment-Based Portfolios also invest all of their assets in certain AIM Allocation Funds. Contributions and investment earnings will be invested in the AIM Allocation Funds based on the anticipated time to college enrollment of the beneficiary, and will typically be invested more heavily in equity mutual funds when the beneficiary is younger and more heavily in fixed-income and money market mutual funds as the beneficiary nears enrollment.

If you invest in the Enrollment-Based Portfolios, the investment manager will reallocate your investments as the beneficiary nears enrollment. In this case, you will be asked to provide (on the Account Application) your beneficiary’s estimated year of enrollment.  The investment manager will make the determination as to whether your investments are scheduled to move to the next portfolio on an annual basis. Thus, if you open an account in 2007 and indicate on your Account Application that your beneficiary is expected to begin enrollment in 2012, the investment manager will reallocate your investments on a schedule which will have you invested in the College Now Portfolio before August 1, 2012. If you elect to invest in the Enrollment-Based Portfolios in an account for a beneficiary who is under age 18, and you do not provide an estimated time to enrollment, your initial investment will be made based on the assumption that enrollment will begin in the year in which the beneficiary turns 18 years of age.

It is important to note that there is market risk involved when investing in mutual funds, including possible loss of principal.

Please refer to the Enrollment Handbook (PDF 260 KB) for more information on The State Farm® College Savings Plan.

The State Farm College Savings Plan is available by registered representatives of State Farm VP Management Corp., One State Farm Plaza, Bloomington, IL 61710, 1-800-447-4930. Please read carefully the Enrollment Handbook and Participation Agreement and consider the investment objectives, risks, fees and expenses and other information associated with The State Farm College Savings Plan before investing or sending money. State and local tax laws vary. If you or the designated beneficiary are not Nebraska residents, you should consider before investing whether you or the designated beneficiary's home state offers any state tax or other benefits to its residents for investing in the plan offered by the state.

The State Farm College Savings Plan (the "plan") is sponsored by the State of Nebraska and administered by the Nebraska State Treasurer. The plan is established in cooperation with State Farm VP Management Corp. ("State Farm"), Invesco Aim Distributors, Inc. and the State of Nebraska, pursuant to which State Farm offers classes of shares in a series of accounts within the Nebraska Educational Savings Plan Trust (the "Trust" and plan issuer) that are managed and distributed by Invesco Aim Capital Management, Inc. ("Invesco AIM") and its affiliates. The Trust offers other accounts that are not affiliated with the plan. State Farm does not provide investment management services for the plan and the accounts in the plan are not insured or guaranteed by State Farm, Invesco Aim, Union Bank and Trust Company, the Trust, the State of Nebraska, the Nebraska State Treasurer, the Nebraska Investment Council, any of their respective affiliates, directors, officers or agents, or any other entity.

Invesco AimSM is a service mark of Invesco Aim Management Group, Inc. Invesco Aim Advisors, Inc., Invesco Aim Capital Management, Inc., Invesco Aim Private Asset Management, Inc. and Invesco PowerShares Capital Management LLC are the investment advisors for the products and services represented by Invesco Aim; they each provide investment advisory services to individual and institutional clients and do not sell securities. Invesco Aim Distributors, Inc. is the distributor for the retail mutual funds, exchange-traded funds and U.S. institutional money market funds represented by Invesco Aim. All entities are indirect, wholly owned subsidiaries of Invesco Ltd.

State Farm and Invesco Aim are not affiliates. Invesco Aim Distributors Inc. is the distributor of the plan.

State Farm VP Management Corp Risk/Important Disclosures. State Farm Mutual Funds Prospectus. The State Farm College Savings Plan Enrollment Handbook (PDF 260 KB) .

AP2008/04/0410