New Features and Enhancements for Higher Education 529 Fund

The Higher Education 529 Fund is a good way to invest for college— and it just got better.

After careful consideration, the Board of Trustees approved a number of enhancements, including the addition of six new Individual Fund options, allocation changes to our Years to Enrollment and Equity Portfolios, and a refinement to the underlying share classes offered through the Program.

Effective November 2, 2007, the following enhancements to the Higher Education 529 Fund will be implemented.

New investment options
This year, we’ve expanded our fund offering within the Individual Fund Portfolio investment strategy and refined our offering within the Years to Enrollment Portfolio.

Individual Fund Portfolios
We’ve added six new underlying funds to our Individual Fund Portfolios:

Van Kampen Core Plus Fixed Income Fund
A fixed-income fund that seeks total return by primarily investing in a diversified mix of U.S. dollar-denominated, investment-grade fixed-income securities, particularly U.S. government, corporate and mortgage securities.

Van Kampen Pace Fund
A large-cap growth fund that seeks capital growth by investing primarily in growth-oriented companies.

Van Kampen International Growth Fund
An international fund that seeks long-term capital appreciation and income by primarily investing in a diversified portfolio of equity securities of issuers located in countries other than the United States.

Van Kampen Small Cap Growth Fund
A small-cap growth fund that seeks capital appreciation by primarily investing in a diversified portfolio of equity securities of small-cap companies that the portfolio management team believes are undervalued.

BNY S&P 500 Equity Index Fund
An index fund that seeks to match the performance of the S&P 500 Index by investing in common stocks that comprise the S&P 500 Index.

BNY U.S. Bond Market Index Fund
An index fund that seeks to track the Lehman Brothers Aggregate Bond Index’s total rate of return by primarily investing in U.S. government, invest-grade corporate, mortgage-backed and asset-backed bonds. The bonds in which the underlying fund invests are denominated in U.S. dollars and feature maturities between 1 and 30 years.

Years to Enrollment and Equity Portfolios
We’ve refined our product offering within these portfolios:

Bond
Van Kampen Core Plus Fixed Income Fund, a fixed-income fund, will replace Van Kampen’s High Yield Fund, Corporate Bond Fund and Government Securities Fund as the underlying investment in the Bond portion of the Years to Enrollment’s Aggressive, Moderate and Conservative portfolios.

Equity
Van Kampen Pace Fund, a large-cap growth fund, will replace Van Kampen Strategic Growth Fund; and Van Kampen International Growth Fund, an international fund, will replace Van Kampen International Advantage Fund as underlying investments within the Stock portion of the Years to Enrollment’s Aggressive, Moderate and Conservative portfolios, as well as in the Equity Portfolio.

Refined underlying share class offering.
In an effort to streamline certain operational processes, the Class A shares of the underlying funds offered through the Higher Education 529 Fund will be replaced with the Class I shares of those funds. This change will appear seamless to Plan Participants and will not result in a change in fees. It is important to note: This change has been made at the level of the underlying investment; Plan Participants will continue to see their purchases, reinvestments, etc. reflected in units, not shares.

To learn more about the Higher Education 529 Fund and the enhancements outlined above, please visit the 529 section of the web site or contact your financial professional today.

Risk Considerations

Each 529 Program Portfolio is subject to the risks of the underlying fund(s) in which it invests. Investments in small- and medium-sized companies entail special risks, such as limited product lines, markets, and financial resources, and greater market volatility than larger, more established companies. Investments in foreign markets entail special risks such as currency, political, economic, and market risks. Fixed-income securities are subject to credit and interest-rate risk. Credit risk refers to the ability of an issuer to make timely payments of interest and principal. Interest-rate risk refers to fluctuations in the value of a fixed-income security resulting from changes in the general level of interest rates. In a declining interest-rate environment, the portfolio may generate less income. In a rising interest-rate environment, bond prices fall. For more risk information about the 529 Program Portfolios and the underlying funds, see the Program Disclosure Statement.

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