Select from the links below to move quickly through this document.
Opening a Direct Plan account
Enrollment Application
What is a 529 plan?
Direct Plan at a glance
Your investment options
Age-based options
Individual portfolios
How to set up your account
Ways to boost your savings
Disclosure Booklet and Tuition Savings Agreement
New Yorks
529 COLLEGE SAVINGS PROGRAM
ONLINE
New York’s 529 Direct Plan
Andrew M. Cuomo, Governor / Thomas P. DiNapoli, State Comptroller
DIRECT PLAN
1
NY529BW
IMPORTANT INFORMATION ABOUT OPENING A NEW ACCOUNT. We are required by federal law to obtain from each person who opens an account
certain personal information—including name, street address, and date of birth among other information—that will be used to verify identity. If you
do not provide us with this information, we will not be able to open the account. If we are unable to verify your identity, we reserve the right to close
your account or take other steps we deem reasonable.
Complete this form to establish an account, or open an account at www.nysaves.org.
Your initial investment, including contributions by check, transfer, or rollover, may be in any amount.
Print clearly, preferably in capital letters and black ink.
To order any form—or get assistance in filling out this one—call us toll-free at 877-NYSAVES (877-697-2837) on business days from
8 a.m. to 9 p.m., Eastern time. Return this form and any other required documents in the enclosed postage-paid envelope, or mail to: New York’s
529 College Savings Program Direct Plan, P.O. Box 55440, Boston, MA 02205-8323. For overnight delivery or registered mail, send to:
New York’s 529 College Savings Program Direct Plan, 95 Wells Avenue, Suite 155, Newton, MA 02459-3204.
1. Account Type
Select one of the account types below. If you do not select an account type, we will open an individual account for you.
Individual account.
UGMA/UTMA account. I am opening this account with assets liquidated from an UGMA/UTMA custodial account. I understand
that this may be a taxable event.
Indicate the state (please abbreviate) under the laws of which the UGMA/UTMA custodial account was opened.
Trust account. I am opening this account under an existing trust. (With this Enrollment Application, you must include copies of the first
and last pages of the trust agreement—sometimes called the “execution pages”—containing the name of the trust, the date of the trust,
and the names and signatures of the original and current trustees.)
Business entity/Other entity. I am opening this account as a corporation, partnership, association, nonprofit, or state/local government
scholarship. (With this Enrollment Application, you must include documents proving the entity was legally formed, and that you are
authorized to sign for the entity. We may request additional information from you if the documents you include are incomplete.)
New York’s 529 College Savings Program Direct Plan
Enrollment Application
REMEMBER TO SIGN IN SECTION 10.
00-66612-001
DO NOT STAPLE
Clear All
NY529BW-page 2 of 7
2
2. Account Owner Information (This person owns and controls the account.)
Only an account owner who is a New York State taxpayer can claim the New York State income tax deduction for his or her contributions.
If the account owner is a minor, also complete Section 5.
Legal Name of Individual or Custodian (first, middle initial, last), Trust, or Business/Entity
/ /
Social Security Number or Other Taxpayer ID Number Birth Date/Trust Date (month, day, year)
Citizenship (If not a U.S. citizen, please indicate country of citizenship.) :
Permanent Street Address or APO/FPO (A P.O. box or rural route number is not acceptable.)
City State Zip
Account Mailing Address if Different From Above (This address will be used as the account’s address of record and for all account mailings.)
City State Zip
Daytime Telephone Number Evening Telephone Number
E-mail Address
3. Beneficiary Information (This individual is the student you’re saving for.)
You may designate only one beneficiary per account.
Note: You can change your beneficiary at any time to another beneficiary who is an eligible “member of the family” of the original beneficiary
that you designate below. Refer to the Disclosure Booklet and Tuition Savings Agreement for more information.
Legal Name of Beneficiary (first, middle initial, last)
/ /
Social Security Number or Individual Taxpayer ID Number Birth Date (month, day, year)
Citizenship (If not a U.S. citizen, please indicate country of citizenship.) :
4. Successor Account Owner Information (optional)
The successor account owner will take control of your account in the event of your death.
You may revoke or change the successor account owner at any time. Refer to the Disclosure Booklet and Tuition Savings Agreement
for more information.
You can have only one successor account owner per account, and he or she must be a U.S. citizen or resident alien.
Name (first, middle initial, last)
/ /
Birth Date (month, day, year)
NY529BW-page 3 of 7
3
5. Designated Parent/Guardian Information
Complete this section only if the person listed in Section 2 is a minor.
Name of Parent or Guardian (first, middle initial, last)
/ /
Social Security Number or Individual Taxpayer ID Number Birth Date (month, day, year)
6. Investment Options
You can invest your contributions in the age-based options, individual portfolios, or a combination of these. Refer to the Disclosure Booklet
and Tuition Savings Agreement for more information.
You may choose up to five of the investments listed below.
You must allocate at least 5% of your contributions to each investment you choose, using whole percentages only.
Your investment percentages must total 100%.
Age-Based Options (Your investment mix automatically becomes more
conservative as the beneficiary nears college age.)
Conservative Age-Based Option
%
Moderate Age-Based Option
%
Aggressive Age-Based Option
%
Individual Portfolios (Your investment mix changes only on your instructions.)
Stock Portfolios:
Aggressive Growth Portfolio
%
Developed Markets Index Portfolio
%
Growth Stock Index Portfolio
%
Mid-Cap Stock Index Portfolio
%
Small-Cap Stock Index Portfolio
%
Value Stock Index Portfolio
%
Balanced Portfolios:
Conservative Growth Portfolio
%
Growth Portfolio
%
Moderate Growth Portfolio
%
Bond Portfolios:
Bond Market Index Portfolio
%
Income Portfolio
%
Inflation-Protected Securities Portfolio
%
Short-Term Investments Portfolio:
Interest Accumulation Portfolio
%
TOTAL
100
%
Please remember to:
n
Choose no more than
five investments.
n
Use whole numbers—
no fractions or decimals.
n
Allocate at least 5%
to each investment
you choose.
n
These Investment
Options are designed
to help you save for
post-secondary higher-
education expenses.
NY529BW-page 4 of 7
4
7. Initial Contribution
There is no minimum initial contribution amount.
If you send one check that combines contributions from more than one source (for example, a $5,000 check that includes $2,500 from your
bank account and $2,500 from an education savings account), mark each contribution source in the appropriate box below and indicate the
amount to be attributed to each.
Contributions and rollovers by check, recurring contributions (also known as automatic investment plan/AIP), or electronic bank transfer (EBT)
will not be available for withdrawal for seven business days.
Source of Funds (Check all that apply.)
A. Personal check. Make each check payable to New York’s 529 College Savings Program Direct Plan.
$
Amount
B. Electronic bank transfer (EBT). To set this up, you must provide bank information in Section 9.
$
This amount will be your initial EBT contribution to open your account.
Amount
C. Recurring contributions (also known as AIP). You can have a set amount automatically transferred from your bank account to
your Direct Plan account on a schedule you choose. To set this up, you must complete Section 8A and Section 9.
D. Direct rollover from another qualified 529 plan or education savings account (ESA). Complete and attach an Incoming
Rollover Form, which is available online at www.nysaves.org or by calling 877-NYSAVES (877-697-2837). Rollovers between 529
plans for the benefit of the same beneficiary can be made only once every 12 months.
$
Amount
E. Indirect rollover from an education savings account (ESA), qualified U.S. savings bond, or another qualified 529 plan.
n
Indirect rollover from another qualified 529 plan or an ESA. Enclose documentation from the distributing financial
institution detailing a breakdown of contributions and earnings.
n
Indirect rollover from a qualified U.S. savings bond. Attach a statement or IRS Form 1099-INT issued by the distributing
financial institution that shows the interest paid upon redemption.
Important: If you do not provide this documentation and you make a nonqualified withdrawal in the future, the entire amount will
be considered taxable earnings.
$ $
Contributions Earnings
F. Payroll deduction. Before selecting this option, be sure to contact your employer’s payroll office to verify that you can participate.
Payroll deduction contributions cannot be made to your Direct Plan account until you have received a payroll deduction confirmation
form from the Direct Plan, provided your signature and Social Security number (or individual taxpayer identification number) on the form,
and submitted the form to your payroll office. The amount you indicate below will be in addition to payroll deductions that you may have
previously established for other Direct Plan accounts.
$
Amount of Deduction Each Pay Period
Check here if you are an employee of the State of New York and would like to make contributions to your
account by payroll deduction.
NY529BW-page 5 of 7
5
8. Subsequent Contributions (optional)
Important: These options can be established only on accounts held by a U.S. bank, savings and loan association, or credit union that is
a member of the Automated Clearing House (ACH) network. Money market mutual funds and cash management accounts offered through
nonbank financial companies may not be used. If you don’t check the box in Section 9 to confirm that your bank is a U.S.-based bank,
your request may not be processed.
Contributions by recurring contribution (also known as automatic investment plan/AIP) or electronic bank transfer (EBT) will not be available for
withdrawal for seven business days.
A. Recurring contributions. Funds will be transferred electronically at regular intervals from a bank, savings and loan, or
credit union account to your Direct Plan account. You may change the investment amount and frequency at any time by logging on
to www.nysaves.org or by calling 877-NYSAVES (877-697-2837). You can start recurring contributions at any time.
Important: To set up this option, you must provide bank information in Section 9.
Amount of Bank Debit:
$
Frequency (Check one.) : Monthly Quarterly
Start Date:
/ /
Your bank account will be debited on the 10th of any month, unless you pick a different date.
Date (month, day, year) Your bank account will be debited (money will be withdrawn) on the date you select and your
investment will be credited (money will be added) to your account in New York’s 529 College
Savings Program Direct Plan on the previous business day. Note: Recurring contributions with a
debit date of January 1st, 2nd, 3rd, or 4th will be credited in the same year as the debit date.
Annual increase. You may increase your recurring contribution automatically on an annual basis. Your contribution will be adjusted each year
according to the information below.
Note: A plan of regular investment cannot ensure a profit or protect against a loss in a declining market.
Amount of Increase:
$
Month*:
*The month in which your AIP contribution will be increased. The first increase will occur at the first instance of the month selected.
B. Electronic bank transfer (EBT). Transfer funds from your bank account to your Direct Plan account at any time online
at www.nysaves.org or by calling 877-NYSAVES (877-697-2837). Your bank information will be kept on file for future
EBT contributions.
Important: To set up this option, you must provide bank information in Section 9.
C. Payroll deduction. Before selecting this option, be sure to contact your employer’s payroll office to verify that you can participate.
Payroll direct deposit contributions cannot be made to your account until you’ve received a payroll direct deposit confirmation from the
plan, provided your signature and Social Security number or individual taxpayer ID number on the form, and submitted the form to your
employer’s payroll office. The amount you indicate below will be in addition to any payroll deductions that you may have previously
established on other Direct Plan accounts.
$
Amount of Deduction Each Pay Period
NY529BW-page 6 of 7
6
9. Bank Information (required to fund an initial contribution by EBT and to establish the recurring contribution (AIP) or EBT option)
Please check this box to confirm that your electronic transfers won’t involve a bank or other financial services company, including any
branch or office, located outside the territorial jurisdiction of the United States. If you’re unable to confirm this, your request may not
be processed.
Bank Name
Account Type:
Bank Routing Number Bank Account Number (Check one.) Checking Savings
Note: The routing number is usually located in the bottom left corner of your checks. You can also ask your bank for the
routing number.
10. Authorization—YOU MUST SIGN BELOW
By signing below, I hereby apply for an account in New York’s 529 College Savings Program Direct Plan. I certify that:
I have full authority and legal capacity to purchase portfolio units and to open an account in New York’s 529 College Savings Program
Direct Plan.
I have received and agree to the terms set forth in the Disclosure Booklet and Tuition Savings Agreement, and will retain a copy of these
documents for my records. I understand that the Program, from time to time, may amend the Disclosure Booklet and Tuition Savings
Agreement, and I understand and agree that I will be subject to the terms of those amendments.
If I have chosen an electronic money-transfer option (for example, recurring contribution or automatic investment plan/AIP), I authorize
the Direct Plan and Ascensus College Savings Recordkeeping Services, LLC, acting upon my instructions, to pay amounts representing
redemptions made by me or to secure payment of amounts invested by me by initiating credit or debit entries to my account at the
designated bank. I authorize the bank to accept any such credits or debits to my account without responsibility for their correctness. I
acknowledge that ACH transactions involving my account must comply with U.S. law. I understand that this authorization may be terminated
by me at any time by notifying the Direct Plan, Ascensus College Savings Recordkeeping Services, LLC, and its affiliates, and the bank, and
that the termination request will be effective as soon as the Direct Plan and Ascensus College Savings Recordkeeping Services, LLC, have
had a reasonable amount of time to act upon it. I understand and agree that all transaction requests placed for my account are my sole
responsibility and are at my sole risk. I agree that the Direct Plan, Ascensus College Savings Recordkeeping Services, LLC, and their
respective affiliates will not be liable for any loss, cost, or expense to me when they act upon instructions reasonably believed to be genuine.
I certify that I have authority to transact on the bank account identified by me in Section 9.
I understand that the Investment Options offered by the Direct Plan have been designed to save for post-secondary higher education
expenses.
Please note: Federal law allows distributions of up to $10,000 per beneficiary per year for tuition expenses in connection with
enrollment or attendance at an elementary or secondary public, private, or religious school (K–12 Tuition Expenses) with no resulting
federal taxes or penalties.
Under New York State law, distributions for K–12 Tuition Expenses will be considered nonqualified withdrawals and will require the
recapture of any New York State tax benefits that have accrued on contributions.
The information I have provided on this form—and all future information I will provide with respect to my account—is true, complete,
and correct.
/ /
Signature of Account Owner (Important: If the account owner is a minor, the designated parent Date (month, day, year)
or guardian must sign.)
NY529BW-page 7 of 7
7
Two ways to supplement your education savings—free!
Ugift
®
is a way to invite family and friends to celebrate a child’s milestones with the gift of education savings. This easy-to-use service lets the
special people in your life make gift contributions to your Direct Plan account.
Upromise
®
lets you add to your education savings simply by spending money on products you use every day—from gasoline to laundry
detergent. By participating in this free service, a percentage of every dollar you spend on thousands of products is returned to you in an account
that you establish with Upromise. You then have the option to roll these funds into your Direct Plan account. (If you’re already a member of
Upromise, you can arrange to have contributions transferred from your existing Upromise account to your Direct Plan account.) To learn more
about these free services, visit www.nysaves.org and follow the online instructions to join Upromise or use Ugift.
Additional Information (optional)
How did you hear about the Program? (Check one.)
Direct mail TV
Newspaper/magazine article Friend or relative
Print ad Advisor
Online ad Employer
E-mail Radio
Upromise website Vanguard
®
website
Events
Upromise is a registered service mark of Upromise, Inc. Ugift is a registered service mark of Ascensus Broker Dealer Services, LLC, Vanguard is a trademark of
The Vanguard Group, Inc.
NY529BW 102018
This page is intentionally left blank
1
New York’s 529 College Savings Program Direct Plan
Trusted Contact Person Form
TCFNY
By completing this form, you designate the person identified below as your Trusted Contact Person, and authorize New York’s College Savings
Program Direct Plan and its present and future direct and indirect subsidiaries, affiliates, successors, and assigns (Plan) to contact your Trusted
Contact Person and disclose information about your Plan account:
n
to address possible financial exploitation;
n
to confirm the specifics of your current contact information, health status, or the identity of any legal guardian, executor, trustee, or holder of a
power of attorney; or
n
as otherwise permitted by Financial Industry Regulatory Authority (FINRA) Rule 2165.
This form does not create or give your Trusted Contact Person a power of attorney. Completing this form alone does not enable
your Trusted Contact Person to access your Account or transfer assets to or from your Account.
Completion of this form is optional and you may withdraw it at any time by notifying the Plan in writing. A Trusted Contact Person must be at least
eighteen (18) years of age. You may add, change, or remove your Trusted Contact Person by using this form.
Print clearly, preferably in capital letters and black ink, or type in your information and print out the completed form. Mail the form to the address
below. Do not staple.
Forms can be downloaded from our website at www.nysaves.org, or you can call us to order any form—or request assistance in completing this
form—at 1-877-NYSAVES (1-877-697-2837) on business days from 8 a.m. to 9 p.m., Eastern time.
Return this form to:
New York’s 529 College Savings Program Direct Plan
P.O. Box 55440
Boston, MA 02205-8323
For overnight delivery or registered mail, send to:
New York’s 529 College Savings Program Direct Plan
95 Wells Avenue, Suite 155
Newton, MA 02459-3204
1. Current Account Owner Information
Account Number (first nine digits)
Name of Account Owner (first, middle initial, last)
Telephone Number (in case we have a question about your account.)
2. Action for Trusted Contact Person
Add Remove Change
DO NOT STAPLE
TCFNY-page 2 of 2
2
3. Trusted Contact Person Information
Name of Trusted Contact Person (first, middle initial, last)
Trusted Contact Person’s Daytime Telephone Number Trusted Contact Person’s Mobile Telephone Number
Trusted Contact Person’s Email Address
Trusted Contact Person’s Mailing Address
City State Zip
Relationship to Account Owner
Advisor Attorney Spouse Family Member Friend Other
4. Signature—YOU MUST SIGN BELOW
By signing below, I hereby certify that:
I authorize the Plan and its service providers to contact the Trusted Contact Person listed in Section 3 of this form and/or to take any action
indicated in Section 2 of this form. I authorize the Plan and its service providers to disclose information to the Trusted Contact Person about
my Plan account(s) in the following circumstances: to address possible financial exploitation; to confirm the specifics of my current contact
information, health status, or the identity of any legal guardian, executor, trustee, or holder of a power of attorney; or as otherwise permitted
by FINRA Rule 2165 (Financial Exploitation of Specified Adults). I certify that the Trusted Contact Person is at least eighteen (18) years of age.
I understand that by signing this form, I authorize Ascensus Broker Dealer Services, LLC, or its affiliates, and The Vanguard Group, Inc., to
provide my Trusted Contact Person with information regarding my Account. I agree to indemnify, defend, and hold harmless the Plan, the
State of New York, its agencies, or any other government or government agencies, Ascensus Broker Dealer Services, LLC, The Vanguard
Group, Inc., and their respective affiliates, agents, and employers, from any losses I incur as a result of the acts or omissions of my Trusted
Contact Person.
All the information that I provided on this form is true and accurate in all material respects. The Plan is entitled to rely on the information
provided herein and the instructions provided on this form. I am bound by any and all statutory, administrative, and operating procedures that
govern the Plan.
/ /
Signature of Account Owner (If the Account owner is a minor, the parent or guardian of record must sign.) Date (month, day, year)
TCFNY 112018
Print Forms
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is one of your most important jobs
New York’s 529 Direct Plan Highlights Booklet
Andrew M. Cuomo, Governor / Thomas P. DiNapoli, State Comptroller
START HERE
SAVING FOR
COLLEGE
Future college grad in your life?
B
WHAT IS A 529 PLAN?
A 529 college savings plan is an investment program that’s
typically run by a state. It offers tax advantages that can
benefit students and account owners. Parents, grandparents,
and other individuals can open an account on behalf of a
child. Your 529 savings can be used for qualified education
expenses, such as tuition, room and board, books, and
computer-related expenses.
1
Raising a future college grad?
COLLEGE
SAVER
IS ONE OF YOUR MOST
IMPORTANT JOBS
By deciding to save in New York’s 529 College
Savings Program Direct Plan, you’re going to help
make a difference in a child’s future. We’re here
to make it easy for you!
Simply start saving
You can set up your Direct Plan account in about 10 minutes!
It doesn’t ma
tter how old your child is—newborn, toddler,
or teenager.
• Open an account with any dollar amount.
• Contribute regularly or whenever it’s convenient.*
Parents, grandparents, friends, relatives, etc., can open
an account!
See the ne
xt page for details.
*
A p
lan of regular investment can’t ensure a profit or protect against a loss.
SAVE FOR
COLLEGE
S hou easy  is to
2
Direct Plan AT A GLANCE
** Earnings on nonqualified withdrawals may be subject to federal income tax and a 10% federal
penalty tax, as well as state and local income taxes. Tax and other benefits are contingent on
meeting other requirements and certain withdrawals are subject to federal, state, and local taxes.
**
D
eductions may be subject to recapture in certain circumstances such as rollovers to another
state’s 529 plan, a withdrawal used to pay elementary or secondary school tuition expenses, or
nonqualified withdrawals.
FLEXIBLE USE OF
SAVINGS
Save for a child, grandchild,
friend—or even yourself.
Use a
t an eligible 2- or 4-
year college or university, a
vocational/technical school, or
a graduate school anywhere
in the United States or abroad.
Pay for qualified expenses,
such as tuition; fees; books;
room and board; computers,
including hardware (e.g.,
printers), software, and internet
access or related services;
and required supplies.
LOW COSTS
Your only expense charged
by the Direct Plan is a total
annual asset-based fee of
0.13% of account assets.
That means for every $1,000
you invest, you’ll pay $1.30
in fees per year. The Direct
Plan charges no advisor
fees or sales commissions.
These types of fees may be
charged by other plans.
TAX BENEFITS FOR
NEW YORK TAXPAYERS
New York taxpayers who are
account owners can deduct
up to $5,000 ($10,000 for a
married couple filing jointly)
of contributions to their
Direct Plan account per year.
If you also own another New
York’s 529 College Savings
Program account, your
maximum total deduction
on all contributions is still
$5,000 (or $10,000 if married
filing jointly) per year.**
Contributions must be
postmarked by December 31
to be eligible for the deduction
for the current year.
OTHERS CAN OPEN
AN ACCOUNT
Relatives and friends can
open an account for the
same child. Combined, these
accounts can total as much
as $520,000.***
FEDERAL TAX BENEFITS
Earnings grow federally
tax-deferred.
W
ithdrawals used for
qualified higher education
expenses at eligible
institutions are free from
federal and New York State
income taxes.*
EXPERT MANAGEMENT
Recordkeeping and related
services for the plan are
managed by Ascensus
Broker Dealer Services, LLC,
and its affiliates, recognized
leaders in administrative
services for 529 plans.
In
vestments are managed
by Vanguard, one of the
world’s largest investment
management companies.
Vanguard is committed to
outstanding performance
and low costs. To learn
more, visit vanguard.com.
3
*** This amount reflects the aggregate amount across all accounts in New Yorks 529 College Savings
Program for the same beneficiary.
***
I
n the event the donor doesn’t survive the 5-year period, a prorated amount will revert back to
the donor’s taxable estate.
GIFT TAX INCENTIVE
You can contribute up to
$15,000 a year (or $30,000
if married filing jointly)
without incurring gift taxes.
Y
ou can contribute up to
$75,000 in a single year
($150,000 for a married
couple filing jointly) for each
beneficiary without incurring
federal gift tax as long as
you don’t make any other
gifts to that beneficiary
for 5 years.† Gifts in excess
of these amounts may
be subject to federal gift
tax. For more information,
consult a qualified tax advisor.
RANGE OF INVESTMENT
OPTIONS
Choose from 16 investments
designed to help you save
for postsecondary higher-
education expenses:
3 age-based options tha
t
will automatically adjust
to more conservative
investments as your child
gets closer to college age.
13 individual portfolios that
let you create and manage
your own investment strategy.
CONVENIENT WAYS
TO CONTRIBUTE
Contribute by check,
recurring contributions (also
known as an automatic
investment plan, or AIP),
electronic bank transfer, or
payroll deduction.
OPTIONAL PROGRAM
TO HELP YOU SAVE MORE
Ugift®: Invite family and
friends to contribute to
your account through this
online service.
Open an account with any amount—
there is no minimum contribution. Visit
nysaves.org to enroll online.
Its easy to
GET STARTED
4
READING TUTOR
JOB NO. 21
5
When you open a Direct Plan account, you’ll be asked to choose
investments. This requires some thought and a review of your options.
These steps should help you through the process:
1. Assess your comfort level with risk
Before you choose your investments, you’ll want to
consider your investment personality. Do you find it
easy to accept major market declines? If so, you may
be comfortable with a more aggressive investment
approach. On the other hand, if you’re someone who
gets concerned when your balance decreases by
even a small percentage, you might prefer a more
conservative approach. How long you have to save
before your beneficiary reaches college age is also
an important consideration.
2. Choose a strategy
Decide if you want a portfolio that adjusts
automatically as your child gets closer to college age
(age-based options) or if you want to create your
own mix of investments (individual portfolios) and
manage it yourself over time.
3. Select your investments
Take a closer look at the options listed on the
following pages. These investment options are
designed to help you save for qualified higher
education. You can also refer to the accompanying
Direct Plan Disclosure Booklet and Tuition Savings
Agreement to review the objective, strategy,
and risks of each portfolio. There are 3 age-based
options to choose from. There are also 13 individual
portfolios for you to choose from if you want to
put together your own mix.
Important: Investment returns are not guaranteed.
Investments in the Direct Plan are subject to risks,
and you could lose money by investing in the
Direct Plan. Participants assume all investment
risks, including the potential for loss of principal, as
well as responsibility for any federal and state tax
consequences. Prices of mid- and small-cap stocks
often fluctuate more than those of large-company
stocks. Foreign investing involves additional
risks, including currency fluctuations and political
uncertainty. Investments in bonds are subject to
interest rate, credit, and inflation risk.
STOCK
PORTFOLIOS
BOND AND SHORT-TERM
RESERVES PORTFOLIOS
MORE AGGRESSIVE
(More risk/reward)
MORE CONSERVATIVE
(Less risk/reward)
BALANCED
PORTFOLIOS
6
Age-based OPTIONS
With this approach, you choose the age-based option—Conservative,
Moderate, or Aggressive—that most closely matches your child’s
age and your comfort level with risk. We’ll automatically move your
savings through a series of portfolios that gradually become more
conservative as your child gets closer to college age.
The table on the right illustrates the 3 age-based
savings paths. You can see how the paths begin
at the more aggressive end of the spectrum with
portfolios that include higher percentages of stocks.
As time goes by, the portfolios move toward the
more conservative side, including higher percentages
of bonds and short-term reserves.
These investment options are designed to help you
save for qualified higher education expenses and
may not be appropriate for elementary or secondary
school time horizons.
PARTY PLANNER
JOB NO. 47
7
Stocks Bonds Short-term reserves
CONSERVATIVE OPTION
Blended
Growth Portfolio
62.5% stocks
37.5% bonds
Moderate
Growth Portfolio
50% stocks
50% bonds
Disciplined
Growth Portfolio
37.5% stocks
62.5% bonds
Conservative
Growth Portfolio
25% stocks
75% bonds
Conservative
Portfolio
12.5% stocks
87.5% bonds
Income Portfolio
75% bonds
25% short-term
reserves
Balanced
Income Portfolio
50% bonds
50% short-term
reserves
Conservative
Income Portfolio
25% bonds
75% short-term
reserves
Interest
Accumulation
Portfolio
100% short-term
reserves
AGE OF BENEFICIARY
0–4 years 5–6 years 7–8 years 9–10 years 11–12 years 13–14 years 15–16 years 17–18 years 19 years or older
MODERATE OPTION
AGE OF BENEFICIARY
0–4 years 5–6 years 7–8 years 9–10 years 11–12 years 13–14 years 15–16 years 17–18 years 19 years or older
AGGRESSIVE OPTION
AGE OF BENEFICIARY
0–4 years 5–6 years 7–8 years 9–10 years 11–12 years 13–14 years 15–16 years 17–18 years 19 years or older
Aggressive
Portfolio
87.5% stocks
12.5% bonds
Growth Portfolio
75% stocks
25% bonds
Blended Growth
Portfolio
62.5% stocks
37.5% bonds
Moderate
Growth Portfolio
50% stocks
50% bonds
Disciplined
Growth Portfolio
37.5% stocks
62.5% bonds
Conservative
Growth Portfolio
25% stocks
75% bonds
Conservative
Portfolio
12.5% stocks
87.5% bonds
Income Portfolio
75% bonds
25% short-term
reserves
Income Portfolio
75% bonds
25% short-term
reserves
Aggressive
Growth Portfolio
100% stocks
Aggressive
Portfolio
87.5% stocks
12.5% bonds
Aggressive
Portfolio
87.5% stocks
12.5% bonds
Growth Portfolio
75% stocks
25% bonds
Blended Growth
Portfolio
62.5% stocks
37.5% bonds
Moderate
Growth Portfolio
50% stocks
50% bonds
Disciplined
Growth Portfolio
37.5% stocks
62.5% bonds
Conservative
Growth Portfolio
25% stocks
75% bonds
Conservative
Portfolio
12.5% stocks
87.5% bonds
To learn more about each portfolio's underlying
investments, go to the Age-based options page
on nysaves.org.
Learn
MORE
8
The following table outlines each of the 13 individual
portfolios and groups them into investment types:
stocks, balanced, bonds, and short-term reserves.
You can choose from these portfolios and put
together your custom mix.
Low costs: For every $1,000 you invest
in the Direct Plan, you’ll only pay $1.30 in
fees per year.
This approach lets you design and manage your own investment strategy.
You choose from a variety of individual portfolios to create a mix of one
or more investments that reflect your time frame and comfort level with
risk. As college gets closer, you decide when and how to rebalance your
investments to a more conservative mix of portfolios. For more details,
refer to the Disclosure Booklet and Tuition Savings Agreement.
INVESTMENT OPTION INVESTMENT OBJECTIVE UNDERLYING VANGUARD INVESTMENTS
Aggressive Growth
Portfolio
Seeks to provide capital appreciation. Vanguard Total Stock Market Index Fund (60%)
Vanguard Total International Stock Index Fund (40%)
Developed Markets
Index Portfolio
Seeks to track the performance of a benchmark
index that measures the investment return of
stocks issued by companies located in Canada
and the major markets of Europe and the
Pacific region.
Vanguard Developed Markets Index Fund (100%)
Growth Stock Index
Portfolio
Seeks to track the performance of a benchmark
index that measures the investment return of
large-capitalization growth stocks.
Vanguard Growth Index Fund (100%)
Mid-Cap Stock Index
Portfolio
Seeks to track the performance of a benchmark
index that measures the investment return of
mid-capitalization stocks.
Vanguard Mid-Cap Index Fund (100%)
Small-Cap Stock Index
Portfolio
Seeks to track the performance of a benchmark
index that measures the investment return of
small-capitalization stocks.
Vanguard Small-Cap Index Fund (100%)
Value Stock Index
Portfolio
Seeks to track the performance of a benchmark
index that measures the investment return of
large-capitalization value stocks.
Vanguard Value Index Fund (100%)
STOCKS
Individua l PORTFOLIOS
9
INVESTMENT OPTION INVESTMENT OBJECTIVE UNDERLYING VANGUARD INVESTMENTS
Bond Market Index
Portfolio
Seeks to track the performance of a broad,
market-weighted bond index.
Vanguard Total Bond Market Index Fund (100%)
Income Portfolio Seeks to provide current income. Vanguard Total Bond Market II Index Fund (34.5%)
Vanguard Total International Bond Index Fund (22.5%)
Vanguard Short-Term Inflation-Protected Securities
Index Fund (18%)
Vanguard Short-Term Reserves Account (25%)
Inflation-Protected
Securities Portfolio
Seeks to provide inflation protection and
income consistent with investment in
inflation-indexed securities.
Vanguard Inflation-Protected Securities Fund (100%)
BONDS
INVESTMENT OPTION INVESTMENT OBJECTIVE UNDERLYING VANGUARD INVESTMENT
Interest Accumulation
Portfolio
Seeks income consistent with the preservation
of principal.
Vanguard Short-Term Reserves Account (100%)
SHORT-TERM RESERVES
INVESTMENT OPTION INVESTMENT OBJECTIVE UNDERLYING VANGUARD INVESTMENTS
Conservative Growth
Portfolio
Seeks to provide current income and low to
moderate capital appreciation.
Vanguard Total Bond Market II Index Fund (52.5%)
Vanguard Total International Bond Index Fund (22.5%)
Vanguard Total Stock Market Index Fund (15%)
Vanguard Total International Stock Index Fund (10%)
Growth Portfolio Seeks to provide capital appreciation and low
to moderate current income.
Vanguard Total Stock Market Index Fund (45%)
Vanguard Total International Stock Index Fund (30%)
Vanguard Total Bond Market II Index Fund (17.5%)
Vanguard Total International Bond Index Fund (7.5%)
Moderate Growth
Portfolio
Seeks to provide capital appreciation and
current income.
Vanguard Total Bond Market II Index Fund (35%)
Vanguard Total International Bond Index Fund (15%)
Vanguard Total Stock Market Index Fund (30%)
Vanguard Total International Stock Index Fund (20%)
BALANCED
To learn more about each individual portfolio’s
underlying investments, go to the Individual
portfolios page on nysaves.org.
Learn
MORE
10
WISH GRANTER
JOB NO. 16
11
There’s no better time than the present to start planning for
your child’s future. We suggest you follow this process to set up
your account with New Yorks 529 Direct Plan.
1. Gather your information
You’ll need:
• Your Social Security number or Individual Taxpayer
Identification number.
Your beneficiary’s birth date and Social Security
number or Individual Taxpayer Identification
number.
• Your bank information.
2. Choose your investments
Review pages 5–9 of this brochure, as well as the
detailed information available in the Disclosure
Booklet and Tuition Savings Agreement.
3. Open an account
Go to nysaves.org to enroll. It only takes about
10 minutes. Or complete the enclosed Enrollment
Application and mail it to the address on the form.
Automatic investing makes saving easy
The most convenient way to make contributions
to your Direct Plan account is to set up recurring
contributions.* You can set a regular schedule of
automatic transfers in any whole dollar amount
from your bank account to your Direct Plan account.
If your employer offers payroll deduction, you can
also have contributions automatically deducted from
your paycheck.
You can also make a one time contribution at any
time through an electronic bank transfer, which
transfers money from your bank account directly to
your Direct Plan account.
Note: To make contributions to your account
by check, go to nysaves.org and download the
Additional Purchase Form. Complete the form and
mail it with your check to the Direct Plan.
* A plan of regular investment can’t ensure a profit or protect against a loss.
NYSAVES.ORG
Ready to GET STARTED?
12
Ugift® is a simple, secure way to invite family and friends to
help your children save for higher education by giving
them the gift that keeps on giving—contributions to their
Direct Plan account.*
Online contributions
You can invite family and friends to contribute
through Ugift, and the contributors will automatically
receive an electronic thank you note when they make
a contribution. You’ll also be able to track online
contributions as they’re deposited into your Direct
Plan account.
Mail-in contributions
Ugift also provides gift coupons that you can
print out to distribute in person or by mail. The
coupons are coded so that when your family
members and friends return the coupons with their
contributions, the money will be deposited into
your Direct Plan account.
How to join
To sign up, log on to your account at nysaves.org,
select the appropriate account, and click the Ugift
logo. You can then follow the instructions to share
your code with friends and family, which they can
use to contribute anytime at ugift529.com.
* The owner of the account is the only contributor eligible for the state income tax deduction.
Bst your savings WITH UGIFT
C
SON OF A
COLLEGE SAVER
JOB WELL DONE!
© 2019 New York’s 529 College Savings Program Direct Plan
NY529CV 112019
The Income Portfolio, Balanced Income Portfolio,
Conservative Income Portfolio, and Interest
Accumulation Portfolio each invest in the Vanguard
Short-Term Reserves Account, which, in turn, invests
in Vanguard Federal Money Market Fund. The
Vanguard Short-Term Reserves Account could lose
money by investing in Vanguard Federal Money
Market Fund. Although the fund seeks to preserve
the value of your investment at $1 per share, it cannot
guarantee it will do so. An investment in the fund is
not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government
agency. The fund's sponsor has no legal obligation to
provide financial support to the fund, and you should
not expect that the sponsor will provide financial
support to the fund at any time.
Before you invest, consider whether your or the
beneficiary’s home state offers any state tax or other
benefits that are only available for investments in that
state's 529 plan. Other state benefits may include
financial aid, scholarship funds, and protection from
creditors.
The Comptroller of the State of New York and the New York
State Higher Education Services Corporation are the Program
Administrators and are responsible for implementing and
administering the Direct Plan.
Ascensus Broker Dealer Services, LLC, serves as Program
Manager and, in connection with its affiliates, provides
recordkeeping and administrative support services and is
responsible for day-to-day operations of the Direct Plan.
The Vanguard Group, Inc., serves as the Investment Manager.
Vanguard Marketing Corporation provides marketing and
distribution services to the Direct Plan.
No guarantee: None of the State of New York, its agencies, the
Federal Deposit Insurance Corporation (FDIC), The Vanguard
Group, Inc., Ascensus Broker Dealer Services, LLC, nor any
of their applicable affiliates insures accounts or guarantees the
principal deposited therein or any investment returns on any
account or investment portfolio.
New York’s 529 College Savings Program currently includes
two separate 529 plans. The Direct Plan is sold directly by the
Program. You may also participate in the Advisor Plan, which
is sold exclusively through financial advisors and has different
investment options and higher fees and expenses as well as
financial advisor compensation.
For more information about New York’s 529
College Savings Program Direct Plan, obtain a
Disclosure Booklet and Tuition Savings Agreement
at nysaves.org or by calling 877-NYSAVES (877-
697-2837). This includes investment objectives,
risks, charges, expenses, and other information.
You should read and consider them carefully
before investing.
Ugift is a registered service mark of Ascensus Broker Dealer
Services, LLC.
Vanguard and the ship logo are registered trademarks of
The Vanguard Group, Inc.
New York’s 529 College Savings Program Direct Plan
P.O. Box 55440
Boston, MA 02205-8323
ny529@nysaves.org
877-NYSAVES (877-697-2837)
nysaves.org
facebook.com/ny529direct
twitter.com/ny529direct
youtube.com/ny529direct
This page is intentionally left blank
1
SUPPLEMENT DATED APRIL 2020 TO NEW YORK’S 529
COLLEGE SAVINGS PROGRAM DIRECT PLAN DISCLOSURE BOOKLET
AND TUITION SAVINGS AGREEMENT DATED AUGUST 31, 2016
This Supplement describes important changes and amends the Disclosure Booklet and Tuition Savings
Agreement dated August 31, 2016 (Disclosure Booklet). You should read this Supplement in conjunction with
the Disclosure Booklet. Unless otherwise indicated, capitalized terms have the same meaning as those in the
Disclosure Booklet. Please keep this Supplement with your Direct Plan documents.
APPRENTICESHIP PROGRAMS AND QUALIFIED LOAN REPAYMENTS
On December 20, 2019, the Further Consolidated Appropriations Act of 2020 (including the Setting Every
Community Up for Retirement Enhancement [SECURE] Act of 2019) was signed into federal law. The SECURE Act
includes new provisions that allow 529 Plan account owners to withdraw assets to pay for:
• Fees, books, supplies, and equipment required for the participation of a Beneficiary in an apprenticeship program
registered and certified with the Secretary of Labor under Section 1 of the National Apprenticeship Act (29 U.S.C.
50) (Apprenticeship Program expenses); and
• Principal or interest on any qualified education loan as defined in section 221(d) of the Internal Revenue Code
(Qualified Loan repayment), of the Beneficiary or a sibling of the Beneficiary, up to a lifetime total of $10,000 per
individual. Please note that if you make a Qualified Loan repayment withdrawal from your Account, you may not
also take a federal income tax deduction for any interest included in that Qualified Loan repayment.
These changes are effective for distributions taken after December 31, 2018, and will have the same federal tax
benefit as Qualified Higher Education Expenses.
Under New York statute, however, the definition of Qualified Withdrawals requires that Direct Plan Account assets
be used to pay for higher education expenses. The New York State Department of Taxation and Finance (DTF) has
stated that distributions used for Apprenticeship Program expenses and Qualified Loan repayments are considered
non-qualified distributions under New York statute and will require the recapture of any New York State tax benefits
that had accrued on contributions. Account Owners in other states should seek guidance from the state in which
they pay taxes.
Throughout the Disclosure Booklet and Tuition Savings Agreement, there are numerous references to Qualified
Higher Education Expenses and Qualified Withdrawals. As noted above, however, these terms have different
meanings under federal and State law. For purposes of federal tax advantages, withdrawals used to pay for Qualified
Higher Education Expenses now include withdrawals used to pay for Apprenticeship Program expenses and
Qualified Loan repayments. Under New York State law, only withdrawals used to pay for Qualified Higher Education
Expenses at Eligible Educational Institutions are tax-advantaged. Please consult a qualified tax advisor about your
personal situation.
Accordingly, the following changes are made to the Disclosure Booklet:
1. The following replaces in its entirety the paragraph entitled “Direct Plan Investment Options Not Designed for
Elementary and Secondary School Tuition Expenses” on page 1 of the Supplement dated April 2018:
Direct Plan Investment Options Not Designed for Elementary and Secondary School Tuition Expenses or Student
Loan Repayments
The Investment Options we offer through the Direct Plan have been designed exclusively for you to save for post-
secondary higher education expenses. They have not been designed to assist you in reaching your K–12 tuition
expense savings or Qualified Loan repayment goals. Specifically, the Age-Based Options are designed for Account
Owners seeking to automatically invest in progressively more conservative Portfolios as their Beneficiary approaches
college age. The Age-Based Options time horizons and withdrawal periods may not match those needed to meet
your K–12 tuition expense savings or Qualified Loan repayment goals, which may be significantly shorter. In addition,
if you are saving for K–12 tuition expenses or to make Qualified Loan repayments and wish to invest in the Individual
Portfolios, please note that these Portfolios are comprised of fixed investments. This means that your assets will
remain invested in that Portfolio until you direct us to move them to a different Portfolio.
2
As noted above, the DTF has stated that distributions for K–12 tuition expenses, Apprenticeship Program expenses,
and Qualified Loan repayments would not be considered qualified distributions under New York statutes and
would require the recapture of any New York State tax benefits that had accrued on contributions. Please consult a
qualified tax or investment advisor about your personal circumstances.
2. The following replaces in its entirety the paragraph added by Supplement dated April 2018, to the end of the
first paragraph under “Section 5. Your Investment Options” on page 16:
When determining whether to save for K–12 tuition expenses or Qualified Loan repayments, note that the Age-Based
Options are designed for college savings time horizons and withdrawal periods and not for K–12 tuition expense or
Qualified Loan repayment time horizons, which may be shorter.
ADDITIONAL UPDATES
The following replaces in its entirety the first two paragraphs in the section entitled “Confirmations and
Statements” on page 38.
You will receive confirmations for any activity in your Account, except for Recurring Contribution transactions, payroll
deduction transactions, the automatic movement of Account assets to a more conservative Age-Based Option as
your Beneficiary ages, and transfers from a Upromise account to your Account, all of which will be confirmed on a
quarterly basis.
You will receive quarterly Account statements to reflect financial transactions only if you have made any of the
following financial transactions within the quarter:
1. Contributions made to your Account;
2. Withdrawals made from your Account;
3. Investment Exchanges;
4. Changes to contribution percentages among selected Investment Options in your Account; and
5. Automatic transfers of Account assets to more conservative Age-Based Options.
The total value of your Account at the end of the quarter will also be included in your quarterly Account Statement.
You can view your quarterly statements online at nysaves.org. You will receive an annual Account statement even if
you have made no financial transactions within the year.
NYSUP2Q 042020
1
SUPPLEMENT DATED OCTOBER 2019 TO NEW YORK’S 529
COLLEGE SAVINGS PROGRAM DIRECT PLAN DISCLOSURE BOOKLET
AND TUITION SAVINGS AGREEMENT DATED AUGUST 31, 2016
This Supplement describes important changes and amends the Disclosure Booklet and Tuition Savings
Agreement dated August 31, 2016. You should read this Supplement in conjunction with the Disclosure
Booklet and Tuition Savings Agreement. Please keep this Supplement with your Direct Plan documents.
1. Change in Underlying Fund Allocations
Effective November 6, 2019, the percentages of each Underlying Fund that Portfolios invest in are updated as
presented in the following table. These percentages replace the percentages listed for each Underlying Fund on
pages 4–9 of the Supplement dated August 2017 and on pages 20–23 of the Disclosure Booklet.
Portfolio Existing Allocation Allocation Effective November 6, 2019
Aggressive
Growth Portfolio
70% Vanguard Total Stock Market Index Fund
30% Vanguard Total International Stock Index Fund
60% Vanguard Total Stock Market Index Fund
40% Vanguard Total International Stock Index Fund
Aggressive
Portfolio*
61.25% Vanguard Total Stock Market Index Fund
26.25% Vanguard Total International Stock Index Fund
10% Vanguard Total Bond Market II Index Fund
2.5% Vanguard Total International Bond Index Fund
52.5% Vanguard Total Stock Market Index Fund
35% Vanguard Total International Stock Index Fund
8.75% Vanguard Total Bond Market II Index Fund
3.75% Vanguard Total International Bond Index Fund
Growth Portfolio
52.5% Vanguard Total Stock Market Index Fund
22.5% Vanguard Total International Stock Index Fund
20% Vanguard Total Bond Market II Index Fund
5% Vanguard Total International Bond Index Fund
45% Vanguard Total Stock Market Index Fund
30% Vanguard Total International Stock Index Fund
17.5% Vanguard Total Bond Market II Index Fund
7.5% Vanguard Total International Bond Index Fund
Blended Growth
Portfolio*
43.75% Vanguard Total Stock Market Index Fund
30% Vanguard Total Bond Market II Index Fund
18.75% Vanguard Total International Stock Index Fund
7.5% Vanguard Total International Bond Index Fund
37.5% Vanguard Total Stock Market Index Fund
26.25% Vanguard Total Bond Market II Index Fund
25% Vanguard Total International Stock Index Fund
11.25% Vanguard Total International Bond Index Fund
Moderate Growth
Portfolio
40% Vanguard Total Bond Market II Index Fund
35% Vanguard Total Stock Market Index Fund
15% Vanguard Total International Stock Index Fund
10% Vanguard Total International Bond Index Fund
35% Vanguard Total Bond Market II Index Fund
30% Vanguard Total Stock Market Index Fund
20% Vanguard Total International Stock Index Fund
15% Vanguard Total International Bond Index Fund
Disciplined
Growth Portfolio*
50% Vanguard Total Bond Market II Index Fund
26.25% Vanguard Total Stock Market Index Fund
12.5% Vanguard Total International Bond Index Fund
11.25% Vanguard Total International Stock Index Fund
43.75% Vanguard Total Bond Market II Index Fund
22.5% Vanguard Total Stock Market Index Fund
18.75% Vanguard Total International Bond Index Fund
15% Vanguard Total International Stock Index Fund
Conservative
Growth Portfolio
60% Vanguard Total Bond Market II Index Fund
17.5% Vanguard Total Stock Market Index Fund
15% Vanguard Total International Bond Index Fund
7.5% Vanguard Total International Stock Index Fund
52.5% Vanguard Total Bond Market II Index Fund
22.5% Vanguard Total International Bond Index Fund
15% Vanguard Total Stock Market Index Fund
10% Vanguard Total International Stock Index Fund
Conservative
Portfolio*
70% Vanguard Total Bond Market II Index Fund
17.5% Vanguard Total International Bond Index Fund
8.75% Vanguard Total Stock Market Index Fund
3.75% Vanguard Total International Stock Index Fund
61.25% Vanguard Total Bond Market II Index Fund
26.25% Vanguard Total International Bond Index Fund
7.5% Vanguard Total Stock Market Index Fund
5% Vanguard Total International Stock Index Fund
Income Portfolio
42% Vanguard Total Bond Market II Index Fund
25% Vanguard Short-Term Reserves Account
18% Vanguard Short-Term Inflation-Protected
Securities Index Fund
15% Vanguard Total International Bond Index Fund
34.5% Vanguard Total Bond Market II Index Fund
25% Vanguard Short-Term Reserves Account
22.5% Vanguard Total International Bond Index Fund
18% Vanguard Short-Term Inflation-Protected
Securities Index Fund
*Not available as an Individual Portfolio.
2
Portfolio Existing Allocation Allocation Effective November 6, 2019
Balanced Income
Portfolio*
50% Vanguard Short-Term Reserves Account
28% Vanguard Total Bond Market II Index Fund
12% Vanguard Short-Term Inflation-Protected
Securities Index Fund
10% Vanguard Total International Bond Index Fund
50% Vanguard Short-Term Reserves Account
23% Vanguard Total Bond Market II Index Fund
15% Vanguard Total International Bond Index Fund
12% Vanguard Short-Term Inflation-Protected
Securities Index Fund
Conservative
Income Portfolio*
75% Vanguard Short-Term Reserves Account
14% Vanguard Total Bond Market II Index Fund
6% Vanguard Short-Term Inflation-Protected
Securities Index Fund
5% Vanguard Total International Bond Index Fund
75% Vanguard Short-Term Reserves Account
11.5% Vanguard Total Bond Market II Index Fund
7.5% Vanguard Total International Bond Index Fund
6% Vanguard Short-Term Inflation-Protected
Securities Index Fund
*Not available as an Individual Portfolio.
2. Extension of Management Agreement
The term of the Management Agreement has been extended to May 6, 2021. Therefore:
The date of scheduled termination of the Management Agreement referenced on page 8 under the heading
“Section 3. Your Risks – Potential Changes to the Program, Program Manager, and Investment Manager” is
changed to May 6, 2021;
The date of the Program Manager’s term under the Management Agreement referenced on page 45 under the
heading “Section 11. Plan Governance and Administration – The Program Manager” is changed to May 6, 2021;
The date of the Investment Manager’s term referenced on page 46 under the Management Agreement
and related subcontracts below the heading “Section 11. Plan Governance and Administration – Direct Plan
Investment Manager” is changed to May 6, 2021; and
The date of termination referenced on page 49 in the definition of Management Agreement under the heading
“Section 12: Glossary” is changed to May 6, 2021.
NYSUPQ3 092019
1
SUPPLEMENT DATED MAY 2019 TO NEW YORK’S 529
COLLEGE SAVINGS PROGRAM DIRECT PLAN DISCLOSURE BOOKLET
AND TUITION SAVINGS AGREEMENT DATED AUGUST 31, 2016
This Supplement describes important changes and amends the Disclosure Booklet and Tuition Savings
Agreement dated August 31, 2016. You should read this Supplement in conjunction with the Disclosure
Booklet and Tuition Savings Agreement. Please keep this supplement with your Direct Plan documents.
1. On the inside front cover page, the third paragraph is replaced in its entirety with the following:
If you would like to open an Account, request an Enrollment Application or other forms, or have other questions
about the Direct Plan, visit us at nysaves.org or call us toll–free at 877–NYSAVES (877–697–2837). Spanish–
speaking investor services are also available. In addition, you may address questions and requests in writing to:
New York’s 529 College Savings Program Direct Plan, P.O. Box 55440, Boston, MA 02205–8323.
A Spanish–translated version of this Disclosure Booklet will be made available by contacting the number or
address provided above, or by visiting nysaves.org/espanol.
2. On page 5, the following replaces footnote 1:
1
Terms and conditions apply to Upromise. Participating companies, contribution levels, and terms and conditions
are subject to change at any time without notice. Transfers from Upromise to a New York’s 529 Direct Plan
Account are subject to a minimum transfer amount. Go to upromise.com for information on transfer minimums
and for more information about Upromise.
3. On page 14, the following replaces the first paragraph under “Upromise”:
We make saving for college easier with Upromise, a rewards service that gives back a percentage of your
eligible spending with hundreds of America’s leading companies as college savings. Once you enroll in the
Direct Plan, your Account can be linked to your Upromise account so that rewards savings accumulated in your
Upromise account are automatically transferred to your Account on a periodic basis, subject to a minimum
transfer amount. Go to upromise.com for more information on transfer minimums. You may be eligible to deduct
all or a portion of your rewards savings transferred to your Account from your New York State adjusted gross
income. See Section 7. Federal and New York State Tax Considerations—New York State Tax Consequences.
4. On page 16, the following statement is inserted after the first paragraph of the “Summary of Investment
Options” section:
Prospectuses and statements of additional information for Underlying Funds are each available only in English,
and may be obtained through vanguard.com.
5. On page 19, the following is inserted at the end of the “Requesting Additional Information About the
Underlying Funds” section:
Prospectuses and statements of additional information for Underlying Funds are each available only
in English.
2
6. The information under “Average Annual Total Returns” on page 32 is replaced with the following:
The performance data shown represent past performance, which is not a guarantee of future results. Investment
returns and principal value will fluctuate, so that units, when sold, may be worth more or less than their original
cost. Current performance may be higher or lower than the performance data cited. For performance data
current to the most recent month–end, call 877-NYSAVES (877-697-2837) or visit nysaves.org.
For the period ended December 31, 2018
Individual Portfolio/Benchmark 1 Year 3 Years 5 Years 10 Years
Since
Portfolio
Inception
Date
1
Inception
Date
Aggressive Growth Portfolio
–8.02% 7.61% 6.70% 12.49% 7.70%
11/14/2003
Benchmark: Aggressive Growth Composite Index
2
–7.85 7.81 6.88 12.72 8.03
Aggressive Portfolio
–6.91 –1.26
9/22/2017
Benchmark: Aggressive Composite Index
–6.73 –1.03
Growth Portfolio
–5.82 6.39 5.82 10.46 7.17
11/14/2003
Benchmark: Growth Composite Index
3
–5.63 6.58 5.99 10.74 7.51
Blended Growth Portfolio
–4.71 –0.63
9/22/2017
Benchmark: Blended Growth Composite Index
–4.54 –0.37
Moderate Growth Portfolio
–3.60 5.07 4.83 8.15 5.98
11/14/2003
Benchmark: Moderate Growth Composite Index
4
–3.48 5.26 5.00 8.38 6.27
Disciplined Growth Portfolio
–2.44 0.08
9/22/2017
Benchmark: Disciplined Growth Composite Index
–2.44 0.18
Conservative Growth Portfolio
–1.48 3.69 3.74 5.73 4.66
11/14/2003
Benchmark: Conservative Growth Composite Index
5
–1.41 3.86 3.90 5.92 4.94
Conservative Portfolio
–0.49 0.47
9/22/2017
Benchmark: Conservative Composite Index
–0.41 0.62
Income Portfolio
1.02 1.91 1.97 2.74 3.06
11/14/2003
Benchmark: Income Composite Index
6
1.00 1.91 1.98 2.86 3.36
Balanced Income Portfolio
1.29 1.33
9/22/2017
Benchmark: Balanced Income Composite Index
1.28 1.30
Conservative Income Portfolio
1.69 1.64
9/22/2017
Benchmark: Conservative Income Composite Index
1.55 1.46
Developed Markets Index Portfolio
–14.58 3.39 0.77 8.13
3/26/2009
Benchmark: Spliced Developed Markets Index
7
–14.22 3.40 0.96 7.86
Small–Cap Stock Index Portfolio
–9.42 7.52 5.15 13.41 8.70
11/19/2003
Benchmark: Spliced Small Cap Index
8
–9.33 7.62 5.24 13.53 8.93
Mid–Cap Stock Index Portfolio
–9.33 6.26 6.10 13.69 8.78
11/20/2003
Benchmark: Spliced Mid Cap Index
9
–9.22 6.40 6.24 13.91 9.22
Growth Stock Index Portfolio
–3.43 9.33 8.90 14.35 8.33
11/20/2003
Benchmark: Spliced Growth Index
10
–3.34 9.47 9.05 14.59 8.73
Value Stock Index Portfolio
–5.53 8.87 7.65 11.76 7.79
11/20/2003
Benchmark: Spliced Value Index
11
–5.40 9.02 7.80 11.96 8.22
Bond Market Index Portfolio
–0.06 1.93 2.36 3.26 3.53
11/20/2003
Benchmark: Spliced Bloomberg Barclays U.S. Aggregate Float
Adjusted Index
12
–0.08 2.09 2.50 3.49 3.88
Inflation–Protected Securities Portfolio
–1.48 1.96 1.60 3.39 3.42
11/20/2003
Benchmark: Bloomberg Barclays U.S. Treasury Inflation
Protected Securities Index
–1.26 2.11 1.69 3.64 3.79
Interest Accumulation Portfolio
2.01 1.44 0.98 0.83 1.57
11/14/2003
Benchmark: Institutional Money Market Funds Average
13
1.81 0.97 0.59 0.34 1.28
3
1
Performance for the Portfolio and its benchmark is calculated since the Portfolio inception date. “Since Inception” returns for less than
one year are not annualized.
2
Weighted 70% Spliced Institutional Total Stock Market Index and 30% FTSE Global All Cap ex US Index. The Spliced Institutional Total
Stock Market Index consists of the Dow Jones Wilshire 5000 Index through April 8, 2005; the MSCI U.S. Broad Market Index through
January 14, 2013; and the CRSP US Total Market Index thereafter.
3
Weighted 52.5% Spliced Institutional Total Stock Market Index, 22.5% FTSE Global All Cap ex US Index, 20% Spliced Bloomberg
Barclays U.S. Aggregate Float Adjusted Index, and 5% Bloomberg Barclays Global Aggregate ex–USD Float Adjusted RIC Capped Index
(USD Hedged).
4
Weighted 35% Spliced Institutional Total Stock Market Index, 15% FTSE Global All Cap ex US Index, 40% Spliced Bloomberg Barclays
U.S. Aggregate Float Adjusted Index, and 10% Bloomberg Barclays Global Aggregate ex–USD Float Adjusted RIC Capped Index (USD
Hedged).
5
Weighted 17.5% Spliced Institutional Total Stock Market Index, 7.5% FTSE Global All Cap ex US Index, 60% Spliced Bloomberg Barclays
U.S. Aggregate Float Adjusted Index, and 15% Bloomberg Barclays Global Aggregate ex–USD Float Adjusted RIC Capped Index (USD
Hedged).
6
Weighted 42% Spliced Bloomberg Barclays U.S. Aggregate Float Adjusted Index, 15% Bloomberg Barclays Global Aggregate ex–USD
Float Adjusted RIC Capped Index (USD Hedged), 18% Bloomberg Barclays U.S. 0–5 Year TIPS Index, and 25% Institutional Money Market
Funds Average.
7
Consists of the MSCI EAFE Index through May 28, 2013; the FTSE Developed ex North America Index through December 20, 2015; the
FTSE Developed All Cap ex US Transition Index through May 31, 2016; and the FTSE Developed All Cap ex US Index thereafter.
8
Consists of the MSCI U.S. Small Cap 1750 Index through January 30, 2013, and the CRSP US Small Cap Index thereafter.
9
Consists of the MSCI U.S. Mid Cap 450 Index through January 30, 2013, and the CRSP US Mid Cap Index thereafter.
10
Consists of the MSCI U.S. Prime Market Growth Index through April 16, 2013, and the CRSP US Large Cap Growth Index thereafter.
11
Consists of the MSCI U.S. Prime Market Value Index through April 16, 2013, and the CRSP US Large Cap Value Index thereafter.
12
Consists of the Barclays U.S. Aggregate Bond Index through December 31, 2009, and the Bloomberg Barclays U.S. Aggregate Float
Adjusted Index thereafter. Effective September 29, 2016, Barclays indexes were rebranded to Bloomberg Barclays indexes.
13
Derived from data provided by Lipper Inc.
7. The first paragraph on the back cover is replaced with the following:
The Comptroller of the State of New York and the New York State Higher Education Services Corporation are the
Program Administrators and are responsible for implementing and administering the Direct Plan.
Ascensus Broker Dealer Services, LLC, serves as Program Manager and, in connection with its affiliates, provides
recordkeeping and administrative support services and is responsible for day–to–day operations of the Direct
Plan. The Vanguard Group, Inc., serves as the Investment Manager. Vanguard Marketing Corporation provides
marketing and distribution services to the Direct Plan.
NYSUP2Q 052019
1
SUPPLEMENT DATED SEPTEMBER 2018 TO NEW YORK’S 529
COLLEGE SAVINGS PROGRAM DIRECT PLAN DISCLOSURE BOOKLET
AND TUITION SAVINGS AGREEMENT DATED AUGUST 31, 2016
This Supplement describes important changes and amends the Disclosure Booklet and Tuition Savings
Agreement dated August 31, 2016. You should read this Supplement in conjunction with the Disclosure Booklet
and Tuition Savings Agreement. Please keep this Supplement with your Direct Plan documents.
REDUCTION IN TOTAL ANNUAL ASSET-BASED FEE
Effective September 27, 2018, the Total Annual Asset-Based Fee (the expense ratio) for each Portfolio will decrease
from 0.15% to 0.13%. Accordingly, all references in the Disclosure Booklet to the Total Annual Asset-Based Fee are
changed from 0.15% to 0.13% beginning September 27, 2018.
1. Effective September 27, 2018, the following replaces the information under the heading “Fee Structure” in
Section 2. Your Investment Costs” on page 6 of the Disclosure Booklet and in the Supplement dated August 2017:
Fee Structure
The following table shows total fees charged to each Portfolio in the Direct Plan. The annualized Underlying Fund
Fee and Program Management Fee added together equal the Total Annual Asset-Based Fee.
Annual Asset Based Fee
Additional
Investor
Expenses
Portfolio
Estimated
Underlying
Fund Fee
1
State Fee
2
Program
Management
Fee
3
Total Annual
Asset-Based
Fee
4
Annual Account
Maintenance
Fee
Aggressive Growth Portfolio 0.03% None 0.10% 0.13% None
Developed Markets Index Portfolio 0.05 None 0.08 0.13 None
Growth Stock Index Portfolio 0.04 None 0.09 0.13 None
Value Stock Index Portfolio 0.04 None 0.09 0.13 None
Mid-Cap Stock Index Portfolio 0.03 None 0.10 0.13 None
Small-Cap Stock Index Portfolio 0.03 None 0.10 0.13 None
Growth Portfolio 0.03 None 0.10 0.13 None
Moderate Growth Portfolio 0.03 None 0.10 0.13 None
Conservative Growth Portfolio 0.03 None 0.10 0.13 None
Income Portfolio 0.05 None 0.08 0.13 None
Bond Market Index Portfolio 0.03 None 0.10 0.13 None
Inflation-Protected Securities Portfolio 0.07 None 0.06 0.13 None
Interest Accumulation Portfolio 0.03 None 0.10 0.13 None
Aggressive Portfolio 0.03 None 0.10 0.13 None
Blended Growth Portfolio 0.03 None 0.10 0.13 None
Disciplined Growth Portfolio 0.03 None 0.10 0.13 None
Conservative Portfolio 0.03 None 0.10 0.13 None
Balanced Income Portfolio 0.06 None 0.07 0.13 None
Conservative Income Portfolio 0.07 None 0.06 0.13 None
1. Estimated Underlying Fund Fee reflects each Underlying Fund’s expense ratio disclosed in its most recent prospectus as of April 26, 2018.
Expenses for multiple-fund Portfolios represent a weighted average of the expenses of the Portfolio’s Underlying Funds. The fees and expenses
of the Underlying Funds may change. Estimated Underlying Fund Fees for the Income Portfolio and the Interest Accumulation Portfolio may
include a stable value wrap fee of between 0.20% and 0.30%, which could reduce the returns of the Portfolios.
2. No separate fee is charged to Accounts by the Program Administrators. The Program Manager and Investment Manager pay a monthly fee to
the Program Administrators to help pay the costs of administering the Program. This payment is not deducted from any Accounts.
3. Vanguard and Ascensus College Savings have agreed to a specific formula for the allocation of the Program Management Fee.
4. Total Annual Asset-Based Fee as of September 27, 2018.
2
2. Effective September 27, 2018, the following replaces the section entitled “Investment Cost Example” in “Section 2.
Your Investment Costs” on page 7 of the Disclosure Booklet and in the Supplement dated August 2017:
The following example is intended to help you compare the cost of investing in the Direct Plan over different time
periods. The costs are the same for each Portfolio. It illustrates the hypothetical expenses that you would incur over
various periods if you were to invest $10,000 in a Portfolio. This example assumes that a Portfolio provides a return
of 5% each year and that the Portfolio’s Total Annual Asset-Based Fee (currently 0.13%) remains the same. The
results apply whether or not the investment is redeemed at the end of the period, but they do not take into account
any redemption that is considered a Nonqualified Withdrawal or otherwise subject to state or federal income taxes,
or any penalties. See Section 9. Withdrawing From Your Account- Withdrawals: Qualified and Nonqualified.
Approximate Cost of a $10,000 Investment in Each Investment Option (assuming a return of 5% per year)
1 Year 3 Years 5 Years 10 Years
$13 $42 $73 $166
This example does not represent actual expenses or performance from the past or in the future. Actual future
expenses may be higher or lower than those shown.
REPLACEMENT OF VANGUARD INSTITUTIONAL TOTAL STOCK MARKET INDEX FUND WITH VANGUARD TOTAL
STOCK MARKET INDEX FUND
Effective September 13, 2018, Vanguard Total Stock Market Index Fund will replace Vanguard Institutional Total
Stock Market Index Fund as an Underlying Fund of the Direct Plan. Accordingly, as of the effective date, references
in the Disclosure Booklet and Tuition Savings Agreement to Vanguard Institutional Total Stock Market Index Fund
are replaced with Vanguard Total Stock Market Index Fund.
NYSUP3Q 092018
1
SUPPLEMENT DATED APRIL 2018 TO NEW YORK’S 529
COLLEGE SAVINGS PROGRAM DIRECT PLAN DISCLOSURE BOOKLET
AND TUITION SAVINGS AGREEMENT DATED AUGUST 31, 2016
This Supplement describes important changes and amends the Disclosure Booklet and Tuition Savings
Agreement dated August 31, 2016. You should read this Supplement in conjunction with the Disclosure
Booklet and Tuition Savings Agreement. Specific language replacements have been underlined for the
convenience of the reader. Please keep this Supplement with your Direct Plan documents.
Federal Tax Reform
1. K–12 Tuition Expenses
On December 22, 2017, new federal tax reform legislation, (H.R. 1 of the 115th Congress, the “Act”) was signed
into law. This Act amends the federal definition of Qualified Higher Education Expenses for the purpose of
withdrawals from 529 Plan accounts to allow 529 Plan account owners to withdraw Plan assets to pay for
expenses for tuition in connection with enrollment or attendance at an elementary or secondary public, private,
or religious school (K–12 tuition expenses) up to $10,000 per year in the aggregate per beneficiary beginning in
2018. As a result of this Act, 529 Plan account owners are authorized to withdraw up to $10,000 per year, per
beneficiary for K–12 tuition expenses without paying federal taxes on account earnings or a federal penalty tax.
Under New York statute, however, the definition of Qualified Withdrawals requires that Direct Plan account
assets are used to pay for higher education expenses. The New York State Department of Taxation and Finance
(DTF) issued a Preliminary Report on the Federal Tax Cuts and Jobs Act (Preliminary Report), indicating that
it appears that distributions for K–12 tuition expenses would not be considered qualified distributions under
New York statutes and would require the recapture of any New York State tax benefits that had accrued on
contributions. Direct Plan Account Owners in other states should seek guidance from the state in which they
pay taxes.
Throughout the Disclosure Booklet and Tuition Savings Agreement, there are numerous references to Qualified
Higher Education Expenses and Qualified Withdrawals. As noted above, however, following the adoption of the
Act, these terms have different meanings under federal and State law. For purposes of federal tax advantages,
withdrawals used to pay for Qualified Higher Education Expenses now include withdrawals used to pay for
K–12 tuition expenses. Under New York State law, only withdrawals used to pay for Qualified Higher Education
Expenses at eligible educational institutions are tax-advantaged.
a. The following is added to the end of “Section 3. Your Risks” on page 8:
Direct Plan Investment Options Not Designed for Elementary and Secondary School Tuition Expenses
The Investment Options we offer through the Direct Plan have been designed exclusively for you to save
for post-secondary higher education expenses. They have not been designed to assist you in reaching
your K–12 tuition expense savings goals. Specifically, the Age-Based Options are designed for Account
Owners seeking to automatically invest in progressively more conservative Portfolios as their Beneficiary
approaches college age. The Age-Based Options time horizons and withdrawal periods may not match
those needed to meet your K–12 tuition expense savings goals, which may be significantly shorter. In
addition, if you are saving for K–12 tuition expenses and wish to invest in the Individual Portfolios, please
note that these Portfolios are comprised of fixed investments. This means that your assets will remain
invested in that Portfolio until you direct us to move them to a different Portfolio. As noted above, the
DTF Preliminary Report indicates that it appears that distributions for K–12 tuition expenses would not be
considered qualified distributions under New York statutes and would require the recapture of any New
York State tax benefits that had accrued on contributions. Please consult a qualified tax or investment
advisor about your personal circumstances.
b. The following is added to the end of the first paragraph under “Section 5. Your Investment Options” on
page 16:
When determining whether to save for K–12 tuition expenses, note that the Age-Based Options are
designed for college savings time horizons and withdrawal periods and not for K–12 time horizons, which
may be shorter.
2
2. Rollovers to Qualified ABLE Programs
The Act also allows 529 Plan account owners to roll over 529 Plan assets into ABLE Plan accounts with no
federal tax on contributions or earnings, subject to the annual contribution limit, between January 1, 2018,
and December 31, 2025. The DTF Preliminary Report indicates that it is possible that such rollovers would not
be taxable events for purposes of New York State taxes, since New York statute currently allows a qualified
withdrawal from a New York 529 Plan account for the death or disability of a beneficiary without the recapture
of contribution deductions. While the tax treatment is yet to be confirmed, please consult with a qualified tax
advisor about your circumstances.
a. The following is added to the end of New York State Tax Consequences on page 36:
New York State Tax Treatment of ABLE Rollover Distributions. In its Preliminary Report, the DTF stated
that it is possible that an ABLE Rollover Distribution would not be a New York State taxable event. While
the tax treatment is yet to be confirmed, please consult a qualified tax or investment advisor about your
personal circumstances.
b. The following is added to the end of “Section. 9. Withdrawing From Your Account” on page 43:
ABLE Rollover Distribution
You may roll over all or part of the balance of your Direct Plan Account to a Qualified ABLE Program
account within 60 days of withdrawal without incurring any federal income tax or the Federal Penalty if:
1. The rollover is to an account for the same Beneficiary; or
2. The rollover is for a new beneficiary who is a Member of the Family of the prior Beneficiary.
An ABLE Rollover Distribution may be subject to state taxes and/or penalties. For a discussion of the New
York State tax impact on an ABLE Rollover Distribution, see Section 7. Federal and New York State Tax
Considerations—New York State Tax Consequences.
c. The following definitions are added to the Glossary beginning on page 48:
Qualified ABLE Program: A program designed to allow individuals with disabilities to save for qualified
disability expenses. Qualified ABLE Programs are sponsored by states or state agencies and are authorized
by Section 529A of the Code.
ABLE Rollover Distribution: A distribution to an account in a Qualified ABLE Program for the same
Beneficiary or a Member of the Family of the Beneficiary. Any distribution must be made before
January 1, 2026, and cannot exceed the annual contribution limit prescribed by Section 529A (b)(2)(B)(i) of
the Code.
We are continuing to evaluate this new legislation and its tax impact in New York, and we encourage Account
Owners to consult a qualified tax advisor about their personal situation.
Federal Gift Tax Exemption
Effective January 1, 2018, Federal Gift Tax Exemption limitation changes were implemented. The new changes
permit contributions up to $15,000 a year ($30,000 if married and making the split-gift election) without
incurring federal gift taxes. Additionally, the maximum contribution to which the five-year exclusion may apply
is $75,000 (or $150,000 for a married couple electing to split gifts).
1. The following replaces the callout at the bottom of page 34:
As of 2018, you can contribute up to $15,000 a year ($30,000 if married and making the split-gift election)
to the Direct Plan without incurring federal gift taxes. This amount is periodically adjusted for inflation.
2. The following replaces the first two paragraphs under Federal Gift and Estate Taxes on page 34:
Contributions (including certain Rollover contributions) to your Account generally are considered completed
gifts to your Beneficiary for federal gift, estate, and generation-skipping transfer tax purposes and are
potentially subject to the federal gift tax. Generally, contributions to your Account will not be subject to the
federal gift tax or generation-skipping tax if the contribution and all other gifts to your Beneficiary (including
all 529 plan accounts) together don’t exceed the federal exclusion amount in 2018 of $15,000 a year
($30,000 if you are married and split gifts with your spouse). (The annual exclusion amount is periodically
adjusted for inflation.) Except in the situations described below, if you were to die while assets remained in
your Account, the value of your Account would not be included in your estate.
Where your contributions to your Account, any other 529 plan accounts, and any other gifts to your
Beneficiary exceed the applicable annual exclusion amount for a single Beneficiary, the contributions may be
subject to federal gift tax and generation-skipping transfer tax in the year of the contribution. If, however,
your contributions to your Account and any other 529 account for your Beneficiary exceed the annual
exclusion amount, you may elect to treat your contributions as if they were made pro rata over five years,
3
thus allowing you to use the annual exclusions for the current year and the following four years. To make
this election, you must file a gift tax return for the year in which the gift was made and make the election on
the return. For 2018, the maximum contribution to which the five-year exclusion may apply is $75,000 (or
$150,000 for a married couple electing to split gifts). Once you make this election, if you make any additional
gifts to the same Beneficiary in the same year or the next four years, the additional gifts may be subject
to gift tax or generation-skipping transfer tax in the calendar year of each additional gift. If you choose to
use the five-year forward election but you die before the end of the five-year period, the portion of the
contribution allocable to the years remaining in the five-year period (beginning with the year after your
death) would be included in your estate for federal estate tax purposes.
Additional Updates
1. The following replaces the State Tax and Other Benefits section on the page preceding the Table of Contents:
If you are not a New York State taxpayer, before investing, consider whether your or the designated Beneficiary’s
home state offers a 529 plan that provides its taxpayers with favorable state tax or other state benefits that may
only be available through investment in such state’s 529 plan, and which are not available through investment in
New York’s 529 College Savings Program Direct Plan. Other state benefits may include financial aid, scholarship
funds, and protection from creditors. Since different states have different tax provisions, this Disclosure Booklet
contains limited information about the state tax consequences of investing in New York’s 529 College Savings
Program Direct Plan. Therefore, please consult your financial, tax, or other advisor to learn more about how state-
based benefits (or any limitations) would apply to your specific circumstances. You also may wish to contact
your home state’s 529 plan(s), or any other 529 plan, to learn more about those plans’ features, benefits, and
limitations. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be
considered when making an investment decision.
2. Program Manager Organizational Change
Effective January 1, 2018, all references throughout the Disclosure Booklet and Tuition Savings Agreement to
“Ascensus Broker Dealer Services, Inc.” are hereby replaced with “Ascensus Broker Dealer Services, LLC.”
3. Impermissible Methods of Contributing
We will not accept contributions made by cash, money order, credit card, traveler’s check, starter check, check
contributions drawn on banks located outside the U.S. or check contributions not in U.S. dollars, third-party
personal check in an amount greater than $10,000, check dated earlier than 180 days before the date of receipt,
postdated check, check with unclear instructions, or any other check the Direct Plan deems unacceptable. We
also will not accept contributions made with stocks, securities, or other noncash assets.
NY529PDS 042018
1
SUPPLEMENT DATED AUGUST 2017 TO NEW YORK’S 529
COLLEGE SAVINGS PROGRAM DIRECT PLAN DISCLOSURE BOOKLET
AND TUITION SAVINGS AGREEMENT DATED AUGUST 31, 2016
This Supplement describes important changes and amends the Disclosure Booklet and Tuition Savings
Agreement dated August 31, 2016. You should read this Supplement in conjunction with the Disclosure
Booklet and Tuition Savings Agreement. Please keep this Supplement with your Direct Plan documents.
Reduction in Total Annual Asset-Based Fee
Effective September 22, 2017, the Total Annual Asset-Based Fee (the expense ratio) for each Portfolio will
decrease from 0.16% to 0.15%. Accordingly, all references in the Disclosure Booklet to the Total Annual Asset-
Based Fee are changed from 0.16% to 0.15% beginning September 22, 2017.
1. Effective September 22, 2017, the following replaces the “Fee Structure” chart on page 6:
Fee Structure
The following table shows total fees charged to each Portfolio in the Direct Plan. The annualized Underlying
Fund Fee and Program Management Fee added together equal the Total Annual Asset-Based Fee.
Annual Asset-Based Fee
Additional
Investor
Expenses
Portfolio
Estimated
Underlying
Fund Fee
1
State Fee
2
Program
Management
Fee
3
Total Annual
Asset-Based
Fee
4
Annual
Account
Maintenance
Fee
Aggressive Growth Portfolio 0.04% None 0.11% 0.15% None
Developed Markets Index Portfolio 0.05 None 0.10 0.15 None
Growth Stock Index Portfolio 0.07 None 0.08 0.15 None
Value Stock Index Portfolio 0.07 None 0.08 0.15 None
Mid-Cap Stock Index Portfolio 0.04 None 0.11 0.15 None
Small-Cap Stock Index Portfolio 0.04 None 0.11 0.15 None
Growth Portfolio 0.03 None 0.12 0.15 None
Moderate Growth Portfolio 0.03 None 0.12 0.15 None
Conservative Growth Portfolio 0.03 None 0.12 0.15 None
Income Portfolio 0.05 None 0.10 0.15 None
Bond Market Index Portfolio 0.03 None 0.12 0.15 None
Inflation-Protected Securities Portfolio 0.07 None 0.08 0.15 None
Interest Accumulation Portfolio 0.08 None 0.07 0.15 None
Aggressive Portfolio 0.04 None 0.11 0.15 None
Blended Growth Portfolio 0.03 None 0.12 0.15 None
Disciplined Growth Portfolio 0.03 None 0.12 0.15 None
Conservative Portfolio 0.03 None 0.12 0.15 None
Balanced Income Portfolio 0.06 None 0.09 0.15 None
Conservative Income Portfolio 0.07 None 0.08 0.15 None
1 Estimated Underlying Fund Expenses reflect each Underlying Fund’s expense ratio disclosed in its most recent prospectus as of
April 27, 2017. Expenses for multiple-fund Portfolios represent a weighted average of the expenses of the Portfolio’s Underlying
Funds. The fees and expenses of the Underlying Funds may change. Estimated Underlying Fund Fees for the Income Portfolio and
the Interest Accumulation Portfolio may include a stable value wrap fee of between 0.20% and 0.30%, which could reduce the
returns of the Portfolios.
2 No separate fee is charged to Accounts by the Program Administrators. The Program Manager and Investment Manager pay a
monthly fee to the Program Administrators to help pay the costs of administering the Program. This payment is not deducted from
any Accounts.
3 Vanguard and Ascensus College Savings have agreed to a specific formula for the allocation of the Program Management Fee.
4 Total Annual Asset-Based Fee as of September 22, 2017.
2
2. Effective September 22, 2017, the following replaces the section entitled “Investment Cost Example” on page 7:
The following example is intended to help you compare the cost of investing in the Direct Plan over different time
periods. The costs are the same for each Portfolio. It illustrates the hypothetical expenses that you would incur
over various periods if you were to invest $10,000 in a Portfolio. This example assumes that a Portfolio provides a
return of 5% each year and that the Portfolio’s Total Annual Asset-Based Fee (currently 0.15%) remains the same.
The results apply whether or not the investment is redeemed at the end of the period, but they do not take into
account any redemption that is considered a Nonqualified Withdrawal or otherwise subject to state or federal
income taxes, or any penalties. See Section 9. Withdrawing From Your Account—Withdrawals: Qualified and
Nonqualified.
Approximate Cost of a $10,000 Investment in Each Investment Option (assuming a return of 5% per year)
1 Year 3 Years 5 Years 10 Years
$15 $48 $85 $192
This example does not represent actual expenses or performance from the past or in the future. Actual future expenses may be higher
or lower than those shown.
Redesign of the Age-Based Options
Effective September 22, 2017, six new Portfolios will be added to the Age-Based Options. This change will provide
for a smoother transition from more aggressive allocations to more conservative allocations as a Beneficiary
approaches college age. These six new Portfolios will only be available as Age-Based Options. They will not
be available as Individual Portfolios. The new Portfolios are: Aggressive Portfolio, Blended Growth Portfolio,
Disciplined Growth Portfolio, Conservative Portfolio, Balanced Income Portfolio, and Conservative Income
Portfolio.
Depending on the age of your Beneficiary, the addition of these new Portfolios may result in some or all of your
assets moving from an existing Portfolio into one of the new Portfolios. Your future contributions will then be
invested in accordance with the new Portfolio allocations in your Account. These changes will occur automatically
and will not count as one of your two annual Investment Exchanges.
In order to facilitate a smooth transition into the new Portfolios, you will not be able to initiate or request any
transactions online or by phone, including withdrawals or Investment Option changes, between 4 p.m., Eastern time,
on Thursday, September 21, 2017, and 8 a.m., Eastern time, on Monday, September 25, 2017. You will also be unable
to initiate or request any other Account changes online or by phone during this period. Recurring Contributions
(automatic investments) scheduled for Friday, September 22, 2017, and transactions or other Account change
requests received by mail after 4 p.m., Eastern time, on Thursday, September 21, 2017, and until 4 p.m., Eastern time,
on Friday, September 22, 2017, will be processed under the new allocations using Portfolio Unit prices as of Monday,
September 25, 2017.
3
3. Effective September 22, 2017, the following replaces the information provided on page 18:
With the Age-Based Options, we automatically exchange assets from one Portfolio to another as your
Beneficiary ages. The exchange takes place annually during the month following the month of your
Beneficiary’s birth date, according to the following schedule:
Stocks Bonds Short-term reserves
Aggressive Option
Aggressive
Growth Portfolio
100% Stocks
Growth Portfolio
75% Stocks
25% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Conservative Option
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
Interest
Accumulation
Portfolio
100% Short-term
reserves
AGE OF BENEFICIARY
0–5 years
Moderate Option
Growth Portfolio
75% Stocks
25% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
6–10 years 11–15 years 16–18 years 19 years or older
Stocks Bonds Short-term reserves New portfolio
Note: The new Portfolios are only available as part of the Age-Based Option. They will not be available as Individual Portfolios.
Conservative Option
Blended
Growth Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Balanced
Income Portfolio
50% Bonds
50% Short-term
reserves
Conservative
Income Portfolio
25% Bonds
75% Short-term
reserves
Interest
Accumulation
Portfolio
100% Short-term
reserves
AGE OF BENEFICIARY
0–4 years 5–6 years 7–8 years 9–10 years 11–12 years 13–14 years 15–16 years 17–18 years 19 years or older
Moderate Option
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Growth Portfolio
75% Stocks
25% Bonds
Blended Growth
Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
Aggressive Option
Aggressive
Growth Portfolio
100% Stocks
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Growth Portfolio
75% Stocks
25% Bonds
Blended Growth
Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
4
4. Effective September 22, 2017, the following new section is added beginning on page 28:
Additional Multi-Fund Portfolios
Aggressive Portfolio
Investment Objective
The Portfolio seeks to provide capital appreciation and low to moderate current income.
Investment Strategy
The Portfolio invests in two Vanguard stock index funds and two Vanguard bond index funds, resulting in
an allocation of 61.25% of its assets to U.S. stocks, 26.25% of its assets to non-U.S. stocks, 10% of its assets to
investment-grade U.S. bonds, and 2.5% of its assets to investment-grade non-U.S. bonds. The percentages of the
Portfolio’s assets allocated to each Underlying Fund are:
Stocks Bonds Short-term reserves
Aggressive Option
Aggressive
Growth Portfolio
100% Stocks
Growth Portfolio
75% Stocks
25% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Conservative Option
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
Interest
Accumulation
Portfolio
100% Short-term
reserves
AGE OF BENEFICIARY
0–5 years
Moderate Option
Growth Portfolio
75% Stocks
25% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
6–10 years 11–15 years 16–18 years 19 years or older
Stocks Bonds Short-term reserves New portfolio
Note: The new Portfolios are only available as part of the Age-Based Option. They will not be available as Individual Portfolios.
Conservative Option
Blended
Growth Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Balanced
Income Portfolio
50% Bonds
50% Short-term
reserves
Conservative
Income Portfolio
25% Bonds
75% Short-term
reserves
Interest
Accumulation
Portfolio
100% Short-term
reserves
AGE OF BENEFICIARY
0–4 years 5–6 years 7–8 years 9–10 years 11–12 years 13–14 years 15–16 years 17–18 years 19 years or older
Moderate Option
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Growth Portfolio
75% Stocks
25% Bonds
Blended Growth
Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
Aggressive Option
Aggressive
Growth Portfolio
100% Stocks
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Growth Portfolio
75% Stocks
25% Bonds
Blended Growth
Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
61.25% Vanguard Institutional Total Stock Market Index Fund
26.25% Vanguard Total International Stock Index Fund
10% Vanguard Total Bond Market II Index Fund
2.5% Vanguard Total International Bond Index Fund
Through its investment in Vanguard Institutional Total Stock Market Index Fund, the Portfolio indirectly invests in
primarily large-capitalization U.S. stocks and, to a lesser extent, mid-, small-, and micro-capitalization U.S. stocks.
The Fund’s target index represents approximately 100% of the investable U.S. stock market.
Through its investment in Vanguard Total International Stock Index Fund, the Portfolio indirectly invests in
international stocks. The Fund is designed to track the performance of the FTSE Global All Cap ex US Index,
a float-adjusted market-capitalization-weighted index designed to measure equity market performance of
companies located in developed and emerging markets, excluding the United States. The index includes more
than 5,800 stocks of companies located in over 45 countries.
Through its investment in Vanguard Total Bond Market II Index Fund, the Portfolio indirectly invests in a broadly
diversified collection of securities that, in the aggregate, approximates the Bloomberg Barclays U.S. Aggregate
Float Adjusted Index in terms of key risk factors and other characteristics. The index represents a wide spectrum
of public, investment-grade, taxable, fixed income securities in the United States—including government,
corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities—
all with maturities of more than 1 year. The Fund maintains a dollar-weighted average maturity consistent with
that of the index, which generally ranges between 5 and 10 years.
Through its investment in Vanguard Total International Bond Index Fund, the Portfolio indirectly invests
in government, government agency, corporate, and securitized non-U.S. investment-grade fixed income
investments, all issued in currencies other than the U.S. dollar and with maturities of more than 1 year. To minimize
the currency risk associated with investments in bonds denominated in currencies other than the U.S. dollar, the
Fund will attempt to hedge its currency exposures.
Investment Risks
Because it invests mainly in stock funds, the Portfolio primarily is subject to stock market risk. Through its bond
fund holdings, the Portfolio has moderate levels of interest rate risk, income risk, call risk, prepayment risk, and
extension risk. The Portfolio also has low to moderate levels of country/regional risk, currency risk, and emerging
markets risk, and low levels of credit risk, index sampling risk, currency hedging risk, nondiversification risk,
liquidity risk, and derivatives risk.
5
Blended Growth Portfolio
Investment Objective
The Portfolio seeks to provide capital appreciation and low to moderate current income.
Investment Strategy
The Portfolio invests in two Vanguard stock index funds and two Vanguard bond index funds, resulting in an
allocation of 43.75% of its assets to U.S. stocks, 18.75% of its assets to non-U.S. stocks, 30% of its assets to
investment-grade U.S. bonds, and 7.5% of its assets to investment-grade non-U.S. bonds. The percentages of the
Portfolio’s assets allocated to each Underlying Fund are:
Stocks Bonds Short-term reserves
Aggressive Option
Aggressive
Growth Portfolio
100% Stocks
Growth Portfolio
75% Stocks
25% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Conservative Option
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
Interest
Accumulation
Portfolio
100% Short-term
reserves
AGE OF BENEFICIARY
0–5 years
Moderate Option
Growth Portfolio
75% Stocks
25% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
6–10 years 11–15 years 16–18 years 19 years or older
Stocks Bonds Short-term reserves New portfolio
Note: The new Portfolios are only available as part of the Age-Based Option. They will not be available as Individual Portfolios.
Conservative Option
Blended
Growth Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Balanced
Income Portfolio
50% Bonds
50% Short-term
reserves
Conservative
Income Portfolio
25% Bonds
75% Short-term
reserves
Interest
Accumulation
Portfolio
100% Short-term
reserves
AGE OF BENEFICIARY
0–4 years 5–6 years 7–8 years 9–10 years 11–12 years 13–14 years 15–16 years 17–18 years 19 years or older
Moderate Option
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Growth Portfolio
75% Stocks
25% Bonds
Blended Growth
Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
Aggressive Option
Aggressive
Growth Portfolio
100% Stocks
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Growth Portfolio
75% Stocks
25% Bonds
Blended Growth
Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
43.75% Vanguard Institutional Total Stock Market Index Fund
30% Vanguard Total Bond Market II Index Fund
18.75% Vanguard Total International Stock Index Fund
7.5% Vanguard Total International Bond Index Fund
Through its investment in Vanguard Institutional Total Stock Market Index Fund, the Portfolio indirectly invests in
primarily large-capitalization U.S. stocks and, to a lesser extent, mid-, small-, and micro-capitalization U.S. stocks.
The Fund’s target index represents approximately 100% of the investable U.S. stock market.
Through its investment in Vanguard Total Bond Market II Index Fund, the Portfolio indirectly invests in a broadly
diversified collection of securities that, in the aggregate, approximates the Bloomberg Barclays U.S. Aggregate
Float Adjusted Index in terms of key risk factors and other characteristics. The index represents a wide spectrum
of public, investment-grade, taxable, fixed income securities in the United States—including government,
corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities—
all with maturities of more than 1 year. The Fund maintains a dollar-weighted average maturity consistent with
that of the index, which generally ranges between 5 and 10 years.
Through its investment in Vanguard Total International Stock Index Fund, the Portfolio indirectly invests in
international stocks. The Fund is designed to track the performance of the FTSE Global All Cap ex US Index,
a float-adjusted market-capitalization-weighted index designed to measure equity market performance of
companies located in developed and emerging markets, excluding the United States. The index includes more
than 5,800 stocks of companies located in over 45 countries.
Through its investment in Vanguard Total International Bond Index Fund, the Portfolio indirectly invests
in government, government agency, corporate, and securitized non-U.S. investment-grade fixed income
investments, all issued in currencies other than the U.S. dollar and with maturities of more than 1 year. To
minimize the currency risk associated with investments in bonds denominated in currencies other than the
U.S. dollar, the Fund will attempt to hedge its currency exposures.
Investment Risks
Because it invests mainly in stock funds, the Portfolio primarily is subject to stock market risk. Through its bond
fund holdings, the Portfolio has moderate levels of interest rate risk, income risk, call risk, prepayment risk, and
extension risk. The Portfolio also has low to moderate levels of country/regional risk, currency risk, emerging
markets risk, and low levels of credit risk, index sampling risk, currency hedging risk, nondiversification risk,
liquidity risk, investment style risk, and derivatives risk.
6
Disciplined Growth Portfolio
Investment Objective
The Portfolio seeks to provide current income and low to moderate capital appreciation.
Investment Strategy
The Portfolio invests in two Vanguard stock index funds and two Vanguard bond index funds, resulting in
an allocation of 26.25% of its assets to U.S. stocks, 11.25% of its assets to non-U.S. stocks, 50% of its assets to
investment-grade U.S. bonds, and 12.5% of its assets to investment-grade non-U.S. bonds. The percentages of the
Portfolio’s assets allocated to each Underlying Fund are:
Stocks Bonds Short-term reserves
Aggressive Option
Aggressive
Growth Portfolio
100% Stocks
Growth Portfolio
75% Stocks
25% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Conservative Option
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
Interest
Accumulation
Portfolio
100% Short-term
reserves
AGE OF BENEFICIARY
0–5 years
Moderate Option
Growth Portfolio
75% Stocks
25% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
6–10 years 11–15 years 16–18 years 19 years or older
Stocks Bonds Short-term reserves New portfolio
Note: The new Portfolios are only available as part of the Age-Based Option. They will not be available as Individual Portfolios.
Conservative Option
Blended
Growth Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Balanced
Income Portfolio
50% Bonds
50% Short-term
reserves
Conservative
Income Portfolio
25% Bonds
75% Short-term
reserves
Interest
Accumulation
Portfolio
100% Short-term
reserves
AGE OF BENEFICIARY
0–4 years 5–6 years 7–8 years 9–10 years 11–12 years 13–14 years 15–16 years 17–18 years 19 years or older
Moderate Option
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Growth Portfolio
75% Stocks
25% Bonds
Blended Growth
Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
Aggressive Option
Aggressive
Growth Portfolio
100% Stocks
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Growth Portfolio
75% Stocks
25% Bonds
Blended Growth
Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
50% Vanguard Total Bond Market II Index Fund
26.25% Vanguard Institutional Total Stock Market Index Fund
12.5% Vanguard Total International Bond Index Fund
11.25% Vanguard Total International Stock Index Fund
Through its investment in Vanguard Total Bond Market II Index Fund, the Portfolio indirectly invests in a broadly
diversified collection of securities that, in the aggregate, approximates the Bloomberg Barclays U.S. Aggregate
Float Adjusted Index in terms of key risk factors and other characteristics. The index represents a wide spectrum
of public, investment-grade, taxable, fixed income securities in the United States—including government,
corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities—
all with maturities of more than 1 year. The Fund maintains a dollar-weighted average maturity consistent with
that of the index, which generally ranges between 5 and 10 years.
Through its investment in Vanguard Institutional Total Stock Market Index Fund, the Portfolio indirectly invests in
primarily large-capitalization U.S. stocks and, to a lesser extent, mid-, small-, and micro-capitalization U.S. stocks.
The Fund’s target index represents approximately 100% of the investable U.S. stock market.
Through its investment in Vanguard Total International Bond Index Fund, the Portfolio indirectly invests
in government, government agency, corporate, and securitized non-U.S. investment-grade fixed income
investments, all issued in currencies other than the U.S. dollar and with maturities of more than 1 year. To minimize
the currency risk associated with investments in bonds denominated in currencies other than the U.S. dollar, the
Fund will attempt to hedge its currency exposures.
Through its investment in Vanguard Total International Stock Index Fund, the Portfolio indirectly invests in
international stocks. The Fund is designed to track the performance of the FTSE Global All Cap ex US Index,
a float-adjusted market-capitalization-weighted index designed to measure equity market performance of
companies located in developed and emerging markets, excluding the United States. The index includes more
than 5,800 stocks of companies located in over 45 countries.
Investment Risks
Because it invests mainly in bond fund holdings, the Portfolio primarily is subject to low to moderate levels of
interest rate risk, income risk, call risk, prepayment risk, and extension risk. The Portfolio also has low to moderate
levels of credit risk, index sampling risk, currency hedging risk, nondiversification risk, liquidity risk, stock market
risk, investment style risk, currency risk, emerging markets risk, country/regional risk, and derivatives risk.
7
Conservative Portfolio
Investment Objective
The Portfolio seeks to provide current income and low to moderate capital appreciation.
Investment Strategy
The Portfolio invests in two Vanguard stock index funds and two Vanguard bond index funds, resulting in
an allocation of 8.75% of its assets to U.S. stocks, 3.75% of its assets to non-U.S. stocks, 70% of its assets to
investment-grade U.S. bonds, and 17.5% of its assets to investment-grade non-U.S. bonds. The percentages of the
Portfolio’s assets allocated to each Underlying Fund are:
Stocks Bonds Short-term reserves
Aggressive Option
Aggressive
Growth Portfolio
100% Stocks
Growth Portfolio
75% Stocks
25% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Conservative Option
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
Interest
Accumulation
Portfolio
100% Short-term
reserves
AGE OF BENEFICIARY
0–5 years
Moderate Option
Growth Portfolio
75% Stocks
25% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
6–10 years 11–15 years 16–18 years 19 years or older
Stocks Bonds Short-term reserves New portfolio
Note: The new Portfolios are only available as part of the Age-Based Option. They will not be available as Individual Portfolios.
Conservative Option
Blended
Growth Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Balanced
Income Portfolio
50% Bonds
50% Short-term
reserves
Conservative
Income Portfolio
25% Bonds
75% Short-term
reserves
Interest
Accumulation
Portfolio
100% Short-term
reserves
AGE OF BENEFICIARY
0–4 years 5–6 years 7–8 years 9–10 years 11–12 years 13–14 years 15–16 years 17–18 years 19 years or older
Moderate Option
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Growth Portfolio
75% Stocks
25% Bonds
Blended Growth
Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
Aggressive Option
Aggressive
Growth Portfolio
100% Stocks
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Growth Portfolio
75% Stocks
25% Bonds
Blended Growth
Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
70% Vanguard Total Bond Market II Index Fund
17.5% Vanguard Total International Bond Index Fund
8.75% Vanguard Institutional Total Stock Market Index Fund
3.75% Vanguard Total International Stock Index Fund
Through its investment in Vanguard Total Bond Market II Index Fund, the Portfolio indirectly invests in a
broadly diversified collection of securities that, in the aggregate, approximates the Bloomberg Barclays U.S.
Aggregate Float Adjusted Index in terms of key risk factors and other characteristics. The index represents
a wide spectrum of public, investment-grade, taxable, fixed income securities in the United States—including
government, corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-
backed securities—all with maturities of more than 1 year. The Fund maintains a dollar-weighted average
maturity consistent with that of the index, which generally ranges between 5 and 10 years.
Through its investment in Vanguard Total International Bond Index Fund, the Portfolio indirectly invests
in government, government agency, corporate, and securitized non-U.S. investment-grade fixed income
investments, all issued in currencies other than the U.S. dollar and with maturities of more than 1 year. To
minimize the currency risk associated with investments in bonds denominated in currencies other than the
U.S. dollar, the Fund will attempt to hedge its currency exposures.
Through its investment in Vanguard Institutional Total Stock Market Index Fund, the Portfolio indirectly invests in
primarily large-capitalization U.S. stocks and, to a lesser extent, mid-, small-, and micro-capitalization U.S. stocks.
The Fund’s target index represents approximately 100% of the investable U.S. stock market.
Through its investment in Vanguard Total International Stock Index Fund, the Portfolio indirectly invests in
international stocks. The Fund is designed to track the performance of the FTSE Global All Cap ex US Index,
a float-adjusted market-capitalization-weighted index designed to measure equity market performance of
companies located in developed and emerging markets, excluding the United States. The index includes more
than 5,800 stocks of companies located in over 45 countries.
Investment Risks
Because it invests mainly in bond fund holdings, the Portfolio primarily is subject to low to moderate levels of
interest rate risk, income risk, call risk, prepayment risk, and extension risk. The Portfolio also has low to moderate
levels of credit risk, index sampling risk, currency hedging risk, nondiversification risk, liquidity risk, stock market
risk, investment style risk, currency risk, emerging markets risk, country/regional risk, and derivatives risk.
8
Balanced Income Portfolio
Investment Objective
The Portfolio seeks to provide current income.
Investment Strategy
The Portfolio invests in three Vanguard bond index funds and one Vanguard short-term reserves account,
resulting in an allocation of 40% of its assets to investment-grade U.S. bonds, 10% of its assets to investment-
grade non-U.S. bonds, and 50% of its assets to short-term investments. The percentages of the Portfolio’s assets
allocated to each Underlying Fund are:
Stocks Bonds Short-term reserves
Aggressive Option
Aggressive
Growth Portfolio
100% Stocks
Growth Portfolio
75% Stocks
25% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Conservative Option
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
Interest
Accumulation
Portfolio
100% Short-term
reserves
AGE OF BENEFICIARY
0–5 years
Moderate Option
Growth Portfolio
75% Stocks
25% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
6–10 years 11–15 years 16–18 years 19 years or older
Stocks Bonds Short-term reserves New portfolio
Note: The new Portfolios are only available as part of the Age-Based Option. They will not be available as Individual Portfolios.
Conservative Option
Blended
Growth Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Balanced
Income Portfolio
50% Bonds
50% Short-term
reserves
Conservative
Income Portfolio
25% Bonds
75% Short-term
reserves
Interest
Accumulation
Portfolio
100% Short-term
reserves
AGE OF BENEFICIARY
0–4 years 5–6 years 7–8 years 9–10 years 11–12 years 13–14 years 15–16 years 17–18 years 19 years or older
Moderate Option
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Growth Portfolio
75% Stocks
25% Bonds
Blended Growth
Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
Aggressive Option
Aggressive
Growth Portfolio
100% Stocks
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Growth Portfolio
75% Stocks
25% Bonds
Blended Growth
Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
50% Vanguard Short-Term Reserves Account
28% Vanguard Total Bond Market II Index Fund
12% Vanguard Short-Term Inflation-Protected Securities Index Fund
10% Vanguard Total International Bond Index Fund
Through its investment in Vanguard Short-Term Reserves Account, the Portfolio indirectly invests in funding
agreements issued by one or more insurance companies, synthetic investment contracts, and shares of Vanguard
Federal Money Market Fund. Funding agreements are interest-bearing contracts that are structured to preserve
principal and accumulate interest earnings over the life of the investment. The investments pay interest at a fixed
minimum rate and have fixed maturity dates that normally range from 2 to 5 years. Vanguard Federal Money
Market Fund invests in high-quality, short-term money market instruments issued by the U.S. government and its
agencies and instrumentalities. For more information about Vanguard Short-Term Reserves Account, please see
the Interest Accumulation Portfolio.
Through its investment in Vanguard Total Bond Market II Index Fund, the Portfolio indirectly invests in a broadly
diversified collection of securities that, in the aggregate, approximates the Bloomberg Barclays U.S. Aggregate
Float Adjusted Index in terms of key risk factors and other characteristics. The index represents a wide spectrum
of public, investment-grade, taxable, fixed income securities in the United States—including government,
corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities—
all with maturities of more than 1 year. The Fund maintains a dollar-weighted average maturity consistent with
that of the index, which generally ranges between 5 and 10 years.
Through its investment in Vanguard Short-Term Inflation-Protected Securities Index Fund, the Portfolio indirectly
invests in inflation-protected public obligations issued by the U.S. Treasury with remaining maturities of less than
5 years. The Fund maintains a dollar-weighted average maturity consistent with that of the target index, which
generally does not exceed 3 years.
Through its investment in Vanguard Total International Bond Index Fund, the Portfolio indirectly invests
in government, government agency, corporate, and securitized non-U.S. investment-grade fixed income
investments, all issued in currencies other than the U.S. dollar and with maturities of more than 1 year. To minimize
the currency risk associated with investments in bonds denominated in currencies other than the U.S. dollar, the
Fund will attempt to hedge its currency exposures.
Investment Risks
Because it invests mainly in bond fund holdings, the Portfolio primarily is subject to low to moderate levels of
interest rate risk, income risk, call risk, prepayment risk, extension risk, and income fluctuation risk. The Portfolio
also has low to moderate levels of credit risk, index sampling risk, currency hedging risk, nondiversification risk,
liquidity risk, and derivatives risk.
9
Conservative Income Portfolio
Investment Objective
The Portfolio seeks to provide current income.
Investment Strategy
The Portfolio invests in three Vanguard bond index funds and one Vanguard short-term reserves account,
resulting in an allocation of 20% of its assets to investment-grade U.S. bonds, 5% of its assets to investment-
grade non-U.S. bonds, and 75% of its assets to short-term investments. The percentages of the Portfolio’s assets
allocated to each Underlying Fund are:
Stocks Bonds Short-term reserves
Aggressive Option
Aggressive
Growth Portfolio
100% Stocks
Growth Portfolio
75% Stocks
25% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Conservative Option
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
Interest
Accumulation
Portfolio
100% Short-term
reserves
AGE OF BENEFICIARY
0–5 years
Moderate Option
Growth Portfolio
75% Stocks
25% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
6–10 years 11–15 years 16–18 years 19 years or older
Stocks Bonds Short-term reserves New portfolio
Note: The new Portfolios are only available as part of the Age-Based Option. They will not be available as Individual Portfolios.
Conservative Option
Blended
Growth Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Balanced
Income Portfolio
50% Bonds
50% Short-term
reserves
Conservative
Income Portfolio
25% Bonds
75% Short-term
reserves
Interest
Accumulation
Portfolio
100% Short-term
reserves
AGE OF BENEFICIARY
0–4 years 5–6 years 7–8 years 9–10 years 11–12 years 13–14 years 15–16 years 17–18 years 19 years or older
Moderate Option
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Growth Portfolio
75% Stocks
25% Bonds
Blended Growth
Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
Income Portfolio
75% Bonds
25% Short-term
reserves
Income Portfolio
75% Bonds
25% Short-term
reserves
Aggressive Option
Aggressive
Growth Portfolio
100% Stocks
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Aggressive
Portfolio
87.5% Stocks
12.5% Bonds
Growth Portfolio
75% Stocks
25% Bonds
Blended Growth
Portfolio
62.5% Stocks
37.5% Bonds
Moderate
Growth Portfolio
50% Stocks
50% Bonds
Disciplined
Growth Portfolio
37.5% Stocks
62.5% Bonds
Conservative
Growth Portfolio
25% Stocks
75% Bonds
Conservative
Portfolio
12.5% Stocks
87.5% Bonds
75% Vanguard Short-Term Reserves Account
14% Vanguard Total Bond Market II Index Fund
6% Vanguard Short-Term Inflation-Protected Securities Index Fund
5% Vanguard Total International Bond Index Fund
Through its investment in Vanguard Short-Term Reserves Account, the Portfolio indirectly invests in funding
agreements issued by one or more insurance companies, synthetic investment contracts, and shares of Vanguard
Federal Money Market Fund. Funding agreements are interest-bearing contracts that are structured to preserve
principal and accumulate interest earnings over the life of the investment. The investments pay interest at a fixed
minimum rate and have fixed maturity dates that normally range from 2 to 5 years. Vanguard Federal Money
Market Fund invests in high-quality, short-term money market instruments issued by the U.S. government and its
agencies and instrumentalities. For more information about Vanguard Short-Term Reserves Account, please see
the Interest Accumulation Portfolio.
Through its investment in Vanguard Total Bond Market II Index Fund, the Portfolio indirectly invests in a
broadly diversified collection of securities that, in the aggregate, approximates the Bloomberg Barclays U.S.
Aggregate Float Adjusted Index in terms of key risk factors and other characteristics. The Index represents
a wide spectrum of public, investment-grade, taxable, fixed income securities in the United States—including
government, corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-
backed securities—all with maturities of more than 1 year. The Fund maintains a dollar-weighted average
maturity consistent with that of the index, which generally ranges between 5 and 10 years.
Through its investment in Vanguard Short-Term Inflation-Protected Securities Index Fund, the Portfolio indirectly
invests in inflation-protected public obligations issued by the U.S. Treasury with remaining maturities of less than
5 years. The Fund maintains a dollar-weighted average maturity consistent with that of the target index, which
generally does not exceed 3 years.
Through its investment in Vanguard Total International Bond Index Fund, the Portfolio indirectly invests
in government, government agency, corporate, and securitized non-U.S. investment-grade fixed income
investments, all issued in currencies other than the U.S. dollar and with maturities of more than 1 year. To
minimize the currency risk associated with investments in bonds denominated in currencies other than the
U.S. dollar, the Fund will attempt to hedge its currency exposures.
Investment Risks
Because it invests mainly in short-term reserves, the Portfolio primarily is subject to income risk. The Portfolio
has low to moderate levels of interest rate risk, call risk, prepayment risk, extension risk, and income fluctuation
risk. The Portfolio also has low to moderate levels of credit risk, index sampling risk, currency hedging risk,
nondiversification risk, liquidity risk, and derivatives risk.
10
Minimum Contribution Amount
Effective September 22, 2017, the minimum initial and subsequent contribution amount has been eliminated
except when using the Upromise rewards service, which remains $25. Accordingly, all references in the Disclosure
Booklet to the minimum contribution amount, other than the Upromise rewards service, are deleted beginning
September 22, 2017.
Maximum Account Balance
Effective September 22, 2017, the Maximum Account Balance will increase from $375,000 to $520,000.
5. Effective September 22, 2017, the definition of “Maximum Account Balance” on page 49 is replaced in its
entirety as follows:
Maximum Account Balance: The maximum aggregate balance of all Accounts for the same Beneficiary in
Qualified Tuition Programs sponsored by the State of New York, as established by the Program Administrators
from time to time, which will limit the amount of contributions that may be made to Accounts for any one
Beneficiary, as required by Section 529 of the Code. The current Maximum Account Balance is $520,000.
11
Average Annual Total Returns
The performance data shown represent past performance, which is not a guarantee of future results. Investment
returns and principal value will fluctuate, so that investors’ units, when sold, may be worth more or less than their
original cost. Current performance may be higher or lower than the performance data cited. For performance
data current to the most recent month-end, call 877-NYSAVES or visit nysaves.org.
For the period ended June 30, 2017
Individual Portfolio/Benchmark 1 Year 3 Year 5 Year 10 Year
Since
Portfolio
Inception
Date
1
Inception
Date
Aggressive Growth Portfolio 18.91% 8.16% 13.94% 6.91% 8.41% 11/14/2003
Benchmark: Aggressive Growth Composite Index
2
19.19 8.30 14.09 7.15 8.75
Bond Market Index Portfolio –0.54 2.34 2.04 4.21 3.85 11/20/2003
Benchmark: Spliced Bloomberg Barclays U.S.
Aggregate Float Adjusted Index
3
–0.33 2.49 2.23 4.50 4.23
Conservative Growth Portfolio 4.06 3.95 5.04 4.53 5.02 11/14/2003
Benchmark: Conservative Growth Composite Index
4
4.27 4.16 5.27 4.74 5.32
Developed Markets Index Portfolio 20.20 1.79 9.00 10.48 3/26/2009
Benchmark: Spliced Developed Markets Index
5
21.37 1.81 9.12 10.06
Growth Portfolio 13.81 6.86 11.00 7.29 7.81 11/14/2003
Benchmark: Growth Composite Index
6
14.04 7.02 11.18 7.55 8.16
Growth Stock Index Portfolio 19.98 10.03 14.74 8.59 8.71 11/20/2003
Benchmark: Spliced Growth Index
7
20.19 10.19 14.93 8.87 9.14
Income Portfolio 0.00 1.46 1.17 3.35 3.25 11/14/2003
Benchmark: Income Composite Index
8
–0.02 1.50 1.24 3.58 3.58
Inflation-Protected Securities Portfolio –0.90 0.59 0.15 3.94 3.77 11/20/2003
Benchmark: Bloomberg Barclays U.S. Treasury
Inflation Protected Securities Index
–0.63 0.63 0.27 4.27 4.16
Interest Accumulation Portfolio 1.15 0.66 0.48 1.06 1.54 11/14/2003
Benchmark: Institutional Money Market Funds Average
9
0.52 0.21 0.13 0.60 1.26
Mid-Cap Stock Index Portfolio 17.11 7.97 14.68 7.27 9.87 11/20/2003
Benchmark: Spliced Mid-Cap Index
10
17.31 8.12 14.83 7.52 10.35
Moderate Growth Portfolio 8.78 5.49 8.06 5.99 6.49 11/14/2003
Benchmark: Moderate Growth Composite Index
11
9.07 5.64 8.24 6.21 6.79
Small-Cap Stock Index Portfolio 18.99 6.67 14.03 7.63 9.75 11/19/2003
Benchmark: Spliced Small Cap Index
12
19.09 6.75 14.10 7.76 10.00
Value Stock Index Portfolio 16.34 8.65 14.28 5.62 8.29 11/20/2003
Benchmark: Spliced Value Index
13
16.53 8.79 14.45 5.84 8.75
1 Performance for the Portfolio and its benchmark is calculated since the Portfolio inception date. “Since Inception” returns for less
than one year are not annualized.
2 Weighted 70% Spliced Institutional Total Stock Market Index and 30% FTSE Global All Cap ex US Index. The Spliced Institutional
Total Stock Market Index consists of the Dow Jones Wilshire 5000 Index through April 8, 2005; the MSCI U.S. Broad Market Index
through January 14, 2013; and the CRSP US Total Market Index thereafter.
3 Consists of the Barclays U.S. Aggregate Bond Index through December 31, 2009, and the Bloomberg Barclays U.S. Aggregate Float
Adjusted Index thereafter. Effective September 29, 2016, Barclays indexes were rebranded to Bloomberg Barclays indexes.
4 Weighted 17.5% Spliced Institutional Total Stock Market Index, 7.5% FTSE Global All Cap ex US Index, 60% Spliced Bloomberg
Barclays U.S. Aggregate Float Adjusted Index, and 15% Bloomberg Barclays Global Aggregate ex-USD Float Adjusted RIC Capped
Index (USD Hedged).
5 Consists of the MSCI EAFE Index through May 28, 2013; the FTSE Developed ex North America Index through December 20, 2015;
the FTSE Developed All Cap ex US Transition Index through May 31, 2016; and the FTSE Developed All Cap ex US Index thereafter.
6 Weighted 52.5% Spliced Institutional Total Stock Market Index, 22.5% FTSE Global All Cap ex US Index, 20% Spliced Bloomberg
Barclays U.S. Aggregate Float Adjusted Index, and 5% Bloomberg Barclays Global Aggregate ex-USD Float Adjusted RIC Capped
Index (USD Hedged).
7 Consists of the MSCI U.S. Prime Market Growth Index through April 16, 2013, and the CRSP US Large Cap Growth Index thereafter.
8 Weighted 42% Spliced Bloomberg Barclays U.S. Aggregate Float Adjusted Index, 15% Bloomberg Barclays Global Aggregate
ex-USD Float Adjusted RIC Capped Index (USD Hedged), 18% Bloomberg Barclays U.S. 0–5 Year TIPS Index, and 25% Institutional
Money Market Funds Average.
9 Derived from data provided by Lipper, a Thomson Reuters Company.
10 Consists of the MSCI U.S. Mid Cap 450 Index through January 30, 2013, and the CRSP US Mid Cap Index thereafter.
11 Weighted 35% Spliced Institutional Total Stock Market Index, 15% FTSE Global All Cap ex US Index, 40% Spliced Bloomberg
Barclays U.S. Aggregate Float Adjusted Index, and 10% Bloomberg Barclays Global Aggregate ex-USD Float Adjusted RIC Capped
Index (USD Hedged).
12 Consists of the MSCI U.S. Small Cap 1750 Index through January 30, 2013, and the CRSP US Small Cap Index thereafter.
13 Consists of the MSCI U.S. Prime Market Value Index through April 16, 2013, and the CRSP US Large Cap Value Index thereafter.
This page intentionally left blank
NYSUP17 092017
SUPPLEMENT DATED JANUARY 2017 TO NEW YORK’S 529
COLLEGE SAVINGS PROGRAM DIRECT PLAN DISCLOSURE BOOKLET
AND TUITION SAVINGS AGREEMENT DATED AUGUST 31, 2016
This Supplement describes important changes and amends the Disclosure Booklet and Tuition Savings Agreement dated
August 31, 2016. You should read this Supplement in conjunction with the Disclosure Booklet and Tuition Savings Agreement.
Please keep this Supplement with your Direct Plan documents.
Target index name change
On August 24, 2016, Bloomberg L.P. acquired Barclays Risk Analytics and Index Solutions Ltd. from Barclays PLC. As a result of this
acquisition, the Barclays indexes have been rebranded as Bloomberg Barclays indexes. Throughout the Disclosure Booklet, all references to
Barclays indexes are renamed as Bloomberg Barclays indexes. At this time, there have been no changes to the composition of the indexes
as a result of the rebranding.
Average Annual Total Returns
The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and principal
value will fluctuate, so that investors’ units, when sold, may be worth more or less than their original cost. Current performance may be
higher or lower than the performance data cited. For performance data current to the most recent month-end, call 1-877-NYSAVES or
visit www.nysaves.org.
For the period ended November 30, 2016
Portfolio 1 Year 3 Year 5 Years 10 Years
Since Portfolio
Inception Date
1
Inception Date
Aggressive Growth
Portfolio
5.92% 7.17% 13.40% 6.50% 7.80% 11/14/2003
Benchmark:
Aggressive Growth
Composite Index
2
6.10 7.30 13.55 6.75 8.15
Bond Market Index
Portfolio
1.81 2.54 2.20 3.94 3.82 11/20/2003
Benchmark: Spliced
Bloomberg Barclays
U.S. Aggregate Float
Adjusted Index
3
2.23 2.75 2.44 4.28 4.22
Conservative Growth
Portfolio
3.28 3.97 5.14 4.35 4.87 11/14/2003
Benchmark:
Conservative Growth
Composite Index
4
3.68 4.21 5.37 4.58 5.18
Developed Markets
Index Portfolio
–1.87 –1.52 5.84 9.01 3/26/2009
Benchmark: Spliced
Developed Markets
Index5
–2.80 1.82 5.89 8.45
Growth Portfolio 5.20 6.25 10.69 6.83 7.38 11/14/2003
Benchmark: Growth
Composite Index
6
5.42 6.40 10.88 7.11 7.73
Growth Stock Index
Portfolio
2.36 8.30 13.56 7.81 7.89 11/20/2003
Benchmark: Spliced
Growth Index
7
2.51 8.46 13.74 8.11 8.33
Income Portfolio 1.87 1.86 1.42 3.22 3.28 11/14/2003
NY529Q4S 122016
Portfolio 1 Year 3 Year 5 Years 10 Years
Since Portfolio
Inception Date
1
Inception Date
Benchmark: Income
Composite Index
8
2.04% 1.93% 1.52% 3.50% 3.63%
Infl ation-Protected
Securities Portfolio
3.66 1.66 0.79 3.76 3.88 11/20/2003
Benchmark:
Bloomberg Barclays
U.S. Treasury
Infl ation Protected
Securities Index
3.96 1.79 0.92 4.13 4.28
Interest
Accumulation
Portfolio
0.83 0.44 0.38 1.21 1.55 11/14/2003
Benchmark:
Institutional Money
Market Funds
Average
9
0.26 0.09 0.06 0.85 1.28
Mid-Cap Stock Index
Portfolio
7.4 4 8 . 39 14. 0 4 7. 3 3 9. 5 4 11 / 2 0 / 2 0 0 3
Benchmark: Spliced
Mid Cap Index
10
7. 5 9 8 . 5 5 14 . 21 7.6 0 10. 0 4
Moderate Growth
Portfolio
4.33 5.20 7.95 5.68 6.20 11/14/2003
Benchmark:
Moderate Growth
Composite Index
11
4.61 5.36 8.15 5.91 6.51
Small-Cap Stock
Index Portfolio
11.13 7.17 14.35 7.76 9.58 11/19/20 03
Benchmark: Spliced
Small Cap Index
12
11.22 7.25 14.43 7.91 9.84
Value Stock Index
Portfolio
12.62 9.15 14.80 5.73 8.04 11/20/2003
Benchmark: Spliced
Value Index
13
12.80 9.31 14.99 5.98 8.52
1
Performance for the Portfolio and its benchmark is calculated since the Portfolio inception date. “Since Inception” returns for less than one year
are not annualized.
2
Weighted 70% Spliced Institutional Total Stock Market Index and 30% FTSE Global All Cap ex US Index. The Spliced Institutional Total Stock
Market Index consists of the Dow Jones Wilshire 5000 Index through April 8, 2005; the MSCI U.S. Broad Market Index through January 14, 2013;
and the CRSP US Total Market Index thereafter.
3
Consists of the Barclays U.S. Aggregate Bond Index through December 31, 2009, and the Bloomberg Barclays U.S. Aggregate Float Adjusted
Index thereafter. Effective September 29, 2016, Barclays indexes were rebranded to Bloomberg Barclays indexes.
4
Weighted 17.5% Spliced Institutional Total Stock Market Index, 7.5% FTSE Global All Cap ex US Index, 60% Spliced Bloomberg Barclays U.S.
Aggregate Float Adjusted Index, and 15% Bloomberg Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged).
5
Consists of the MSCI EAFE Index through May 28, 2013; the FTSE Developed ex North America Index through December 20, 2015; the FTSE
Developed All Cap ex US Transition Index through May 31, 2016; and the FTSE Developed All Cap ex US Index thereafter.
6
Weighted 52.5% Spliced Institutional Total Stock Market Index, 22.5% FTSE Global All Cap ex US Index, 20% Spliced Bloomberg Barclays U.S.
Aggregate Float Adjusted Index, and 5% Bloomberg Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged).
7
Consists of the MSCI U.S. Prime Market Growth Index through April 16, 2013; and the CRSP US Large Cap Growth Index thereafter.
8
Weighted 42% Spliced Bloomberg Barclays U.S. Aggregate Float Adjusted Index, 15% Bloomberg Barclays Global Aggregate ex-USD Float
Adjusted RIC Capped Index (USD Hedged), 18% Bloomberg Barclays U.S. 0-5 Year TIPS Index, and 25% Institutional Money Market Funds
Average.
9
Derived from data provided by Lipper Inc.
10
Consists of the MSCI U.S. Mid Cap 450 Index through January 30, 2013; and the CRSP US Mid Cap Index thereafter.
11
Weighted 35% Spliced Institutional Total Stock Market Index, 15% FTSE Global All Cap ex US Index, 40% Spliced Bloomberg Barclays U.S.
Aggregate Float Adjusted Index, and 10% Bloomberg Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged).
12
Consists of the MSCI U.S. Small Cap 1750 Index through January 30, 2013; and the CRSP US Small Cap Index thereafter.
13
Consists of the MSCI U.S. Prime Market Value Index through April 16, 2013; and the CRSP US Large Cap Value Index thereafter.
Direct Plan Disclosure Booklet
and Tuition Savings Agreement
Please Retain This Disclosure Booklet
This Disclosure Booklet—including the Tuition Savings
Agreement and other supplements distributed from time to
time—contains information about New York’s 529 College
Savings Program Direct Plan (Direct Plan). It describes the
risks associated with, and the terms and conditions of,
investing in the Direct Plan. It should be read carefully and
retained for your future reference.
The information contained in this Disclosure Booklet is
authorized by the Office of the Comptroller of the State of
New York (the Comptroller) and the New York State Higher
Education Services Corporation (HESC). The Comptroller
and HESC serve together as the Program Administrators.
Information other than what is contained in this Booklet
must not be relied upon as having been authorized by the
Program Administrators.
If you would like to open an Account, request an Enrollment
Application or other forms, or have other questions about
the Direct Plan, visit us at nysaves.org or call us toll-free at
877-NYSAVES (877-697-2837). You may also address
questions and requests in writing to: New York’s 529 College
Savings Program Direct Plan, P.O. Box 55440, Boston, MA
02205-8323.
This Disclosure Booklet Supersedes Any Prior
Booklets
This Disclosure Booklet is dated August 31, 2016, and
supersedes all previously distributed Disclosure Booklets,
including any supplements. No person should rely upon any
previously distributed Disclosure Booklet or supplement
after the date of this Disclosure Booklet. Information
contained in this Disclosure Booklet is believed by the
Program Administrators to be accurate as of its date but is
not guaranteed by the Program Administrators and is
subject to change without notice.
Investments Are Not Guaranteed or Insured
None of the United States; the State of New York; the
Comptroller; HESC; any agency or instrumentality of the
federal government or of the State of New York; any fund
established by the State of New York or through operation
of New York State law for the benefit of insurance contracts
or policies generally; Ascensus Broker Dealer Services, Inc.,
or any of its affiliates; The Vanguard Group, Inc., or any of its
affiliates; any agent, representative, or subcontractor
retained in connection with the Program; or any other
person makes any guarantee of, insures, or has any legal or
moral obligation to insure either the ultimate payout of all or
any portion of the amount contributed to an Account or any
investment return, or an investment return at any particular
level, on an Account.
Investments in the Direct Plan are not guaranteed or insured
by the Direct Plan, the Program Administrators, the Federal
Deposit Insurance Corporation (FDIC), or any other entity.
The value of your Account will depend on market conditions
and the performance of the Investment Options you select.
Investments in the Direct Plan can go up or down in value,
and you could lose money by investing in the Direct Plan.
Tax Disclaimer
This Disclosure Booklet is not intended to constitute, nor
does it constitute, legal or tax advice. This Disclosure
Booklet was developed to support the marketing of New
York’s 529 College Savings Program Direct Plan and
cannot be relied upon for purposes of avoiding the
payment of federal tax penalties. You should consult your
legal or tax advisor about the impact of these rules on your
individual situation.
State Tax and Other Benefits
If you are not a New York State taxpayer, before investing,
consider whether your or your Beneficiary’s home state
offers a 529 plan that provides its taxpayers with favorable
state tax or other benefits that may only be available
through investment in the home state’s 529 plan, and
which are not available through investment in New York’s
529 College Savings Program Direct Plan. Since different
states have different tax provisions, this Disclosure Booklet
contains limited information about the state tax
consequences of investing in New York’s 529 College
Savings Program Direct Plan. Therefore, please consult
your financial, tax, or other advisor to learn more about
how state-based benefits (or any limitations) would apply
to your specific circumstances. You also may wish to
contact your home state’s 529 plan(s), or any other 529
plan, to learn more about those plans’ features, benefits,
and limitations. Keep in mind that state-based benefits
should be one of many appropriately weighted factors to
be considered when making an investment decision.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 1
Contents
Section 1.
Introduction and Frequently
Asked Questions 3
Section 2.
Your Investment Costs 6
Fees and Charges 6
Investment Cost Example 7
Section 3.
Your Risks 8
No Guarantee of Principal or Earnings; No Insurance 8
Inflation 8
Limited Investment Direction 8
Limited Liquidity 8
No Suitability Determination 8
Not a Direct Investment in Mutual Funds or
Registered Securities 8
Potential Changes to the Program, Program Manager,
and Investment Manager 8
Uncertainty of Tax Consequences 9
No Indemnification 9
Eligibility for Financial Aid 9
No Guarantee That Investments Will Cover
Education-Related Expenses 10
Education Savings and Investment Alternatives 10
No Guarantee of Admission to Any Institution
and Related Matters 10
Medicaid and Other Federal and State
Noneducational Benefits 10
Section 4.
Opening and Funding Your Account 11
Who Can Participate 11
How to Open an Account 11
Choose a Beneficiary 11
Choose Investment Options 11
Designate a Successor Account Owner 12
Contribute to Your Account 12
Section 5.
Your Investment Options 16
Summary of Investment Options 16
Age-Based Options 17
Individual Portfolio Options 19
Pricing of Portfolio Units and Trade Date Policies 30
Section 6.
A Note on Past Performance 31
Section 7.
Federal and New York State
Tax Considerations 33
Federal Tax Considerations 33
New York State Tax Consequences 35
Section 8.
Maintaining Your Account 37
Substituting Beneficiaries 37
Change of Account Ownership 37
Changing Your Investment Options 37
Unused Account Assets 38
Confirmations and Statements 38
Safeguarding Your Account 39
Affirmative Duty to Promptly Notify Us of Errors 39
Section 9.
Withdrawing From Your Account 40
Estimated Time to Process Withdrawals 40
Withdrawals: Qualified and Nonqualified 40
Section 10.
Protections and Limitations 44
Creditor Protection Under U.S. and
New York State Law 44
No Assignments or Pledges 44
Certain Rights of the Program Administrators 44
Account Restrictions 44
2 Direct Plan Disclosure Booklet and Tuition Savings Agreement
Section 11.
Plan Governance and Administration 45
Who’s Who in the Program 45
Legal and Other Contractual Matters 46
Section 12.
Glossary 48
Section 13.
The Direct Plan’s Privacy Policy 51
New York State Personal Privacy Protection
Law Notice 51
Section 14.
New York’s College Savings Program
Direct Plan Tuition Savings Agreement 52
Direct Plan Disclosure Booklet and Tuition Savings Agreement 3
Section 1. Introduction and Frequently Asked Questions
For many families and individuals, paying the cost of higher
education seems like a big challenge. New York’s 529
College Savings Program Direct Plan is designed to help you
meet that challenge with a tax-advantaged Account.
This Booklet contains important information that can help
you decide whether to open an Account in the Direct Plan.
You’ll learn about topics that include:
How to Get Started. You’ll find information about
establishing an Account, naming a Beneficiary, who is
eligible to own and contribute to the Account, as well as
the Minimum and Maximum Contributions. See Section 4.
Opening and Funding Your Account.
How Much You’ll Pay. A discussion of the Direct Plan’s fee
structure can help you understand what your expected
cost will be. Other than the asset-based fee charged to
each Portfolio, there are no annual account fees or
charges to open an Account. See Section 2. Your
Investment Costs.
Your Investment Choices. Detailed profiles of the Direct
Plan’s 16 Investment Options are included to help you
make informed choices for your Beneficiary’s future.
Among your choices are three Age-Based Options that
automatically adjust to more conservative investments as
your Beneficiary gets closer to college age. Keep in mind
that the Portfolios offer growth potential, but there’s also
risk, and you could lose money. See Section 5. Your
Investment Options.
Federal and State Tax Advantages. 529 plans, named for
the section of the Internal Revenue Code (the Code) that
authorized them, offer federal and, in some cases, state
tax benefits, including tax-free withdrawals if the money is
used for Qualified Higher-Education Expenses. If you don’t
use the money on qualified expenses, the earnings will be
subject to federal and applicable state and local income
taxes as well as a Federal Penalty. See Section 7. Federal
and New York State Tax Considerations and Section 9.
Withdrawing From Your Account.
We’ve also included a Glossary of important terms in Section
12 to help you better understand the unique benefits and
requirements of the Direct Plan.
Included below are answers to questions frequently asked
by college savers. This format gives you a quick way to get
acquainted with some of the most important aspects of the
Direct Plan.
Since the questions and answers on the following pages are
not all-inclusive, it is important that you review the rest of
the Booklet for complete details. Doing so will help prepare
you to take full advantage of the Direct Plan’s benefits, while
also understanding its risks.
Frequently Asked Questions
What Is New York’s 529 College Savings Program
Direct Plan?
Offered by New York State, the Direct Plan lets you save for
college or other postsecondary education by investing in a
tax-advantaged way. Through your Account, you select and
then contribute to one or more of the 16 Investment Options
included in the Direct Plan. Any investment earnings will
grow tax-deferred and your withdrawals from the Account
are federally and New York State tax free, provided that the
money is used for Qualified Higher-Education Expenses.
How Do I Open an Account?
You can open an Account online at nysaves.org. It only
takes about 10 minutes. Or complete the Enrollment
Application enclosed in the enrollment kit and mail the
application to New York’s 529 College Savings Program
Direct Plan, P.O. Box 55440, Boston, MA 02205-8323. Or call
877-NYSAVES (877-697-2837).
Is My Direct Plan Account Guaranteed?
No, your Account isn’t FDIC-insured or otherwise
guaranteed. Investment returns will vary depending on your
Portfolio and will be subject to market, interest rate, and
other financial risks. You could lose a portion or all of your
investment. Because there are risks involved, you should
think carefully before investing in the Direct Plan.
What Fees Are Associated With the Direct Plan?
The Direct Plan charges no sales commissions or annual fees.
The Direct Plan does charge an asset-based fee to cover
investment management services and program
management. This fee is taken as a percentage of the total
assets you invest in each Portfolio. As of the date of this
Disclosure Booklet, the Annual Asset-Based Fee is 0.16%.
This translates into an annual cost of $1.60 for every $1,000
in your Account. The money is automatically deducted from
the assets in your Account.
Do I Have to Live in New York to Open an Account?
No, you don’t have to live in New York. The Direct Plan has
no income restrictions and is open to U.S. citizens or resident
aliens with:
A valid Social Security number or other taxpayer
identification number, and
A U.S. address (that isn’t a post office box).
Your Beneficiary (or student) doesn’t have to be a New
York State resident but must be a U.S. citizen or resident
alien with a valid Social Security number or taxpayer
identification number.
4 Direct Plan Disclosure Booklet and Tuition Savings Agreement
How Can I Use the Money in My Account?
Your Account can be used for any purpose. However,
to qualify for federal tax-free withdrawals on earnings,
the money must be used for Qualified Higher-Education
Expenses for your Beneficiary at an Eligible Educational
Institution.
Qualified Higher-Education Expenses include tuition, fees,
books, supplies, and equipment required for enrollment or
attendance; the purchase of certain computer equipment,
software, internet access, and related services, if used
primarily by your Beneficiary while enrolled at an Eligible
Educational Institution; certain room and board expenses
for your Beneficiary; and certain expenses for students
with special needs. See Section 9. Withdrawing From Your
Account—Withdrawals: Qualified and Nonqualified and
Section 7. Federal and New York State Tax Considerations.
Can I Use My Direct Plan Account to Pay for a
College Outside of New York?
Yes, your Direct Plan Account may be used to pay for
postsecondary education in the United States and abroad.
Generally, if a school has been assigned a federal school
code by the Department of Education, it’s an Eligible
Educational Institution under Section 529 of the Code.
The list of eligible institutions includes most colleges,
universities, graduate schools, and vocational schools.
You can get the current list of eligible schools online at
fafsa.ed.gov/FAFSA/app/schoolSearch.
What Tax Benefits Can I Receive?
If you are a New York State taxpayer, you may deduct
up to $5,000 ($10,000 for married couples filing jointly)
in computing your state taxable income each year. Only
you, as the Account Owner, can take the tax deduction
and only on contributions you or your spouse make to
your Account.
Earnings will grow deferred from federal and New York
State income tax.
Withdrawals from your Account are federal and New
York State tax free provided that you use the money
for Qualified Higher-Education Expenses.
If you are not a New York State taxpayer, depending on
where you live or pay state income tax, your earnings may
or may not be subject to state income tax. In these cases,
you may want to check with your tax advisor.
Who Can Contribute to My Direct Plan Account?
Once you open an Account with as little as $25 ($15, if you
are investing through payroll deduction), other people may
contribute to the Account until the balance of all Accounts
in the Program for the same Beneficiary reaches a maximum
of $375,000. Friends, family, and other individuals may
contribute directly to your Account. However, only you, the
Account Owner, can make investment decisions and receive
the New York State tax deduction (if you are a New York
State taxpayer) for your contributions to the Direct Plan.
Will My Direct Plan Account Affect My Beneficiary’s
Eligibility for Financial Aid?
Generally, assets in a 529 account owned by a parent
or student are used to calculate the student’s expected
family contribution toward college costs. Under some
circumstances, withdrawals from a 529 account also
may affect financial aid. However, each educational
institution may treat assets held in a 529 plan differently.
Under New York State law, assets in an Account are
not taken into consideration in determining the eligibility
of your Beneficiary of the Account or the Account
Owner for financial aid under any New York State-
administered financial aid programs, such as the
Tuition Assistance Program.
What if My Beneficiary Doesn’t Go to College or Use
the Funds in the Account?
If your Beneficiary doesn’t go to college or use the funds in
the Account for college, you may do one of the following:
Keep the funds in the Account where they can continue to
be invested and grow tax-deferred. The funds will be
available in future years if your Beneficiary decides to go
to college or needs the funds for graduate school or other
higher education.
Transfer the balance, without being subject to federal
income taxes or penalty, to an eligible family member of
your Beneficiary (including a parent, child, sibling, step- or
half-sibling, cousin, certain in-laws, or yourself, if you are
an eligible family member). See Section 8. Maintaining
Your Account.
Withdraw the money and use it for noneducational
purposes. (However, your earnings would be subject to
federal income tax and the Federal Penalty, as well as
state and local income taxes. New York State taxpayers
may also be subject to recapture of previously taken state
tax deductions for contributions to the Account.)
Can I Transfer Ownership of My Account to a New
Account Owner?
Yes, you can transfer ownership of all of your Account at
any time by completing the necessary forms. Keep in mind
that there may be tax consequences for transferring your
Account and the new Account Owner would be responsible
for any recapture (for Nonqualified Withdrawals, Qualified
Scholarships, and Rollovers to a 529 plan outside of the
Program) of New York State tax deductions previously
taken on amounts contributed to the Account. You should
contact a qualified tax advisor regarding the application of
federal, state, and local tax law to your circumstances before
transferring ownership of an Account.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 5
What Is Upromise®?
Upromise can help you save money for college. If you join
Upromise, a percentage of your eligible purchases from
hundreds of participating companies, products, and services
go into a separate account. If you choose, your Direct Plan
Account can be linked to this Upromise account so that
cash accumulated through your Upromise account is
automatically transferred to your Direct Plan Account on a
periodic basis. Upromise is separate from New York’s 529
Direct Plan and is not affiliated with the State of New York.
1
To read more FAQs, visit nysaves.org.
1 Terms and conditions apply to Upromise. Participating companies, contribution levels, and terms and conditions are subject to change at any
time without notice. Transfers from Upromise to a New York’s 529 Direct Plan Account are subject to a $25 minimum. Go to upromise.com
for more information about Upromise.
6 Direct Plan Disclosure Booklet and Tuition Savings Agreement
Section 2. Your Investment Costs
Fees and Charges
We have established fees and other charges relating to
the Direct Plan. These fees may change from time to time.
Any changes will be included in subsequent Disclosure
Booklets or supplements. The fees are described and
illustrated below.
Total Annual Asset-Based Fee
Each Portfolio has a Total Annual Asset-Based Fee, which
includes both administrative and investment management
costs. This Fee is a percentage of the assets in each Portfolio
and is deducted from the assets. The Direct Plan currently
charges an annual asset-based fee of 0.16%.
The Total Annual Asset-Based Fee is composed of
the following:
Underlying Fund Fee
This fee includes investment advisory fees, administrative
costs, and other expenses of the Underlying Funds in your
Portfolio, which are paid to Vanguard.
Program Management Fee
This fee is paid to the Program Manager and the
Investment Manager to cover the expenses of
administering and managing the Direct Plan.
As an Account Owner, you indirectly bear a pro-rata share
of the Program Management Fee and the Underlying Fund
Fee. These fees reduce the return you will receive from
investing in the Direct Plan.
Fee Structure
The following table shows total fees charged to each Portfolio in the Direct Plan. The annualized Underlying Fund Fee and
Program Management Fee added together equal the Total Annual Asset-Based Fee.
Annual Asset-Based Fee
Additional
Investor
Expenses
Portfolio
Estimated
Underlying
Fund Fee
1
State Fee
2
Program
Management
Fee
3
Total Annual
Asset-Based
Fee
4
Annual
Account
Maintenance
Fee
Aggressive Growth Portfolio 0.04% None 0.12% 0.16% None
Developed Markets Index Portfolio 0.06 None 0.10 0.16 None
Growth Stock Index Portfolio 0.07 None 0.09 0.16 None
Value Stock Index Portfolio 0.07 None 0.09 0.16 None
Mid-Cap Stock Index Portfolio 0.05 None 0.11 0.16 None
Small-Cap Stock Index Portfolio 0.05 None 0.11 0.16 None
Growth Portfolio 0.03 None 0.13 0.16 None
Moderate Growth Portfolio 0.03 None 0.13 0.16 None
Conservative Growth Portfolio 0.03 None 0.13 0.16 None
Income Portfolio 0.05 None 0.11 0.16 None
Bond Market Index Portfolio 0.04 None 0.12 0.16 None
Inflation-Protected Securities Portfolio 0.07 None 0.09 0.16 None
Interest Accumulation Portfolio 0.08 None 0.08 0.16 None
1 Estimated Underlying Fund Fees reflect each Underlying Fund’s expense ratio disclosed in its most recent prospectus as of August 10, 2016.
Expenses for multiple-fund Portfolios represent a weighted average of the expenses of the Portfolio’s Underlying Funds. The fees and expenses
of the Underlying Funds may change. Estimated Underlying Fund Fees for the Income Portfolio and the Interest Accumulation Portfolio may
include a stable value wrap fee of between 0.20% and 0.30%, which could reduce the returns of the Portfolios.
2 No separate fee is charged to Accounts by the Program Administrators. The Program Manager and Investment Manager pay a monthly fee to
the Program Administrators to help pay the costs of administering the Program. This payment is not deducted from any Accounts.
3 Vanguard and Ascensus College Savings have agreed to a specific formula for the allocation of the Program Management Fee.
4 Total Annual Asset-Based Fee as of August 31, 2016.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 7
Other Program Charges, Fees, or Penalties
Except for the Program Management Fee and the
convenience fees described below, there is currently no
charge, fee, or penalty imposed by the Program for opening
or maintaining any Account. There are no additional fees for
any transactions in any Account, any withdrawals from an
Account, or any transfers to or from a 529 plan outside of
the Program. However, we may impose additional charges,
fees, or penalties in the future. Any brokerage fees or
expenses for trading assets within an Underlying Fund will
be borne by the Underlying Fund.
We will report optional convenience fees (e.g., for priority
delivery, as applicable) as withdrawals on Form 1099-Q.
Such fees may be considered Nonqualified Withdrawals. You
should consult your tax advisor regarding calculating and
reporting any tax liability as applicable.
Investment Cost Example
The following example is intended to help you compare
the cost of investing in the Direct Plan over different
time periods. The costs are the same for each Portfolio.
It illustrates the hypothetical expenses that you would
incur over various periods if you invest $10,000 in a
Portfolio. This example assumes that a Portfolio provides a
return of 5% a year, and that the Portfolio’s Total Annual
Asset-Based Fee (currently 0.16%) remains the same. The
results apply whether or not the investment is redeemed at
the end of the period, but they do not take into account any
redemption that is considered a Nonqualified Withdrawal or
otherwise subject to state or federal income taxes, or any
penalties. See Section 9. Withdrawing From Your Account
Withdrawals: Qualified and Nonqualified.
Approximate Cost of a $10,000 Investment in Each
Investment Option (assuming a return of 5% per
year)
1 Year 3 Years 5 Years 10 Years
$16 $52 $90 $205
This example does not represent actual expenses or
performance from the past or in the future. Actual future
expenses may be higher or lower than those shown.
8 Direct Plan Disclosure Booklet and Tuition Savings Agreement
Section 3. Your Risks
In addition to the investment risks of the Portfolios, there are
certain risks relating to the Direct Plan you should be aware
of before opening an Account or making a contribution. In
this section, we will discuss some of these key risks. You
should consult a qualified tax or financial advisor before
making a contribution. Investment risks are discussed in
Section 5. Your Investment Options.
No Guarantee of Principal or Earnings; No
Insurance
The value of your Account may increase or decrease over
time based on the performance of the Portfolio(s) you
select. It is possible that, at any given time, your Account’s
value may be less than the total amount contributed. Neither
the Direct Plan nor any of its Associated Persons makes any
guarantee of, insures, or has any legal or moral obligation to
insure either the ultimate payout of all or any portion of the
amount contributed to an Account or any investment return,
or an investment return at any particular level, on an
Account. Direct Plan Accounts are not bank deposits and
are not insured or guaranteed by the FDIC or any other
federal or state government agency.
Inflation
Increases in the cost of living or the cost of higher
education may reduce or eliminate the value of the
returns of your Account.
Limited Investment Direction
You may not direct how a Portfolio’s assets are invested.
The ongoing management of Direct Plan investments is the
responsibility of the Comptroller, Ascensus College Savings,
and Vanguard. In addition, you are limited under federal law
in your ability to change the investment allocation for
previous contributions and earnings.
Limited Liquidity
Investment in the Program involves the risk of reduced
liquidity regarding your investment. Once you open an
Account for your Beneficiary, the circumstances under
which funds may be withdrawn without federal and state
tax liability are limited.
The tax liabilities can include the Federal Penalty and,
for New York State taxpayers, recapture of New York
State tax deductions. See Section 7. Federal and New
York State Tax Considerations.
No Suitability Determination
The Direct Plan and its Associated Persons make no
representations regarding the suitability of the Direct Plan’s
Investment Options for any particular investor. Other types
of investments and other types of college savings vehicles
may be more appropriate depending on your personal
circumstances. Please consult your tax or investment
advisor for more information.
Not a Direct Investment in Mutual Funds or
Registered Securities
Money you contribute to your Account will be invested in
Portfolios that hold Vanguard mutual funds. However, the
Trust, the Direct Plan, and the Direct Plan’s Portfolios are not
mutual funds. An investment in the Program is an
investment in municipal fund securities that are issued and
offered by the Trust. These securities are not registered with
the U.S. Securities and Exchange Commission (SEC) or any
state, nor are the Trust, the Program, or the Program’s
Portfolios registered as investment companies with the SEC
or any state.
Potential Changes to the Program, Program
Manager, and Investment Manager
The Program Administrators reserve the right, in their sole
discretion, to discontinue the Program or to change any
aspect of the Program. For example, the Program
Administrators may change the Direct Plan’s fees and
charges; add, subtract, or merge Portfolios; close a Portfolio
to new investors; or change the Underlying Fund(s) of a
Portfolio. Depending on the nature of the change, you may
be required to participate in, or be prohibited from
participating in, the change with respect to an Account you
opened before the change. Limitations imposed by New
York State law may require the Portfolios to invest assets
differently from the manner described in Section 5. Your
Investment Options. This, in turn, may affect the ability of
the Portfolios to achieve their investment objectives.
Under New York State law, the Comptroller and HESC must
solicit competitive bids for a new Program Manager whose
appointment would be effective at the scheduled
termination of the current Management Agreement with
Ascensus Broker Dealer Services, Inc., in May 2019. In certain
circumstances Ascensus Broker Dealer Services, Inc., may
cease to be the Program Manager, or Vanguard may cease
to be the Investment Manager, before the scheduled
termination date—e.g., due to a material breach of the
Management Agreement by Ascensus Broker Dealer
Services, Inc.
Under the Management Agreement and certain related
agreements, the Program Administrators may hire new
or additional entities in the future to manage all or part of
the Direct Plan’s assets. See Section 11. Plan Governance
and Administration.
If a new Program Manager is selected, you might have to
establish new Accounts in order to make additional
contributions to the Program. The fee and compensation
structure applicable to a new Program Manager, or that
applicable to Ascensus Broker Dealer Services, Inc., under a
new Management Agreement, might be different from the
Direct Plan Disclosure Booklet and Tuition Savings Agreement 9
Management Fee currently charged. Additionally, a
successor Investment Manager may achieve different
investment results than would have been achieved by
Vanguard, even if managing similar Investment Options.
Uncertainty of Tax Consequences
Federal and New York State law and regulations governing
the administration of 529 plans could change in the future.
The United States Department of the Treasury (Treasury
Department) has issued proposed regulations under Section
529 of the Code (Proposed Regulations), an advance notice
of proposed rulemaking describing new proposed
regulations that will be issued under Section 529 (Advance
Notice) and, in conjunction with the Internal Revenue
Service (IRS), has published certain notices with respect to
the anticipated modification of the Proposed Regulations
(Notices). As of the date of this Disclosure Booklet,
taxpayers may rely upon the Proposed Regulations and the
Notices until final regulations are issued or other further
action is taken by the Treasury Department. The Proposed
Regulations and the Notices do not, however, provide
guidance on certain aspects of the Program.
It is uncertain when the Treasury Department may issue final
regulations or, if it does, to what extent such final regulations
will differ from the Proposed Regulations and Notices. Other
administrative guidance or court decisions might be issued
that could adversely affect the federal tax consequences
with respect to the Program or to contributions to, or
withdrawals from, your Account. Congress could also amend
Section 529 or other federal law in a way that would
materially change or eliminate the federal tax treatment
described above. If necessary, the Comptroller, HESC, and
the Program Manager intend to modify the Program
according to applicable law for the Program to meet the
requirements of Section 529. If the Program, as currently
structured or as subsequently modified, does not meet the
requirements of Section 529 for any reason, the tax
consequences to Account Owners and Beneficiaries are
uncertain. Therefore, it is possible that you could be subject
to taxes on undistributed earnings in your Account, as well
as to other adverse tax consequences. You may wish to
consider consulting a qualified tax advisor.
The Program received a ruling from the IRS on May 30, 2001,
providing that the Program, as then operated, satisfied the
requirements for exemption from federal income tax as a
qualified tuition program described in Section 529. There
can be no assurance that this ruling is applicable to the
Program as currently operated. In addition, changes in
the law governing any of the federal and state tax
consequences described in this Disclosure Booklet might
require material changes to the Program’s operations in
order for the anticipated federal and New York State tax
consequences to apply.
The New York State tax matters discussed in this Booklet
are based on opinions of the New York State Department of
Taxation and Finance (DTF). DTF’s opinions are based on
the conclusion that the Direct Plan is a Qualified Tuition
Program within the meaning of Section 529. There can be no
assurance that there will not be subsequent official
interpretations or court decisions that could adversely affect
the New York State tax consequences for you and your
Beneficiary or that the federal law or the New York statutes
governing aspects of the Program may not be amended in a
way that could materially alter or eliminate those
consequences. See Section 7. Federal and New York State
Tax Considerations.
No Indemnification
The Program, Ascensus College Savings, and Vanguard will
not indemnify any Account Owner or Beneficiary against
losses or other claims arising from the official or unofficial
acts, negligent or otherwise, of the Program Administrators
or State employees.
Eligibility for Financial Aid
Being the Account Owner or Beneficiary of an Account may
adversely affect your eligibility for financial aid:
In making decisions about eligibility for financial aid
programs offered by the U.S. government and the amount
of aid required, the U.S. Department of Education takes
into consideration a variety of factors, including the
assets owned by the student (i.e., your Beneficiary) and
the assets owned by the student’s parents. The U.S.
Department of Education generally expects the student
to spend a substantially larger portion of his or her own
assets on educational expenses than the parents. For
purposes of these federal programs, available balances
in a 529 plan account are treated as an asset of (a) the
student if the student is an independent student, or
(b) the parent if the student is a dependent student,
regardless of whether the owner of the 529 plan account
is the student or the parent. In addition, a distribution
from a 529 plan may be considered income to your
Beneficiary in calculating eligibility for the school year
following the distribution.
With respect to financial aid programs offered by
educational institutions and other nonfederal sources, the
effect of being the Account Owner or Beneficiary of an
Account varies from institution to institution. Accordingly,
no generalizations can be made about the effect of being
the Account Owner or Beneficiary of an Account on the
student’s eligibility for financial aid, or the amount of aid
the student may qualify for, from these sources.
Under New York State law, assets in an Account are
not taken into consideration in determining the eligibility
of your Beneficiary or the Account Owner of the
Account for financial aid under any New York State-
administered financial aid programs, such as the
Tuition Assistance Program.
The federal and nonfederal financial aid program treatments
of assets in the Program are subject to change at any time.
You should, therefore, check and periodically monitor the
applicable laws and other official guidance, as well as
particular Program and institutional rules and requirements,
to determine the impact of your Account on eligibility under
particular financial aid programs.
10 Direct Plan Disclosure Booklet and Tuition Savings Agreement
No Guarantee That Investments Will Cover
Education-Related Expenses
There is no guarantee that the money in your Account will
be sufficient to cover all of your Beneficiary’s higher-
education expenses, even if contributions are made in the
maximum allowable amount for your Beneficiary. The future
rate of increase in higher-education expenses is uncertain
and could exceed the rate of investment return earned by
any or all of the Portfolios over any relevant period.
Education Savings and Investment
Alternatives
There are many 529 plans other than the Direct Plan,
including the Advisor-Guided Plan, other college savings
plans, and prepaid tuition plans. These 529 plans offer
education savings and investment alternatives that differ
from those available in the Direct Plan. Other 529 plans, and
other investment alternatives, may offer state tax and other
benefits not available under the Program. These 529 plans
and other investment alternatives may have different tax
and other consequences, may have different eligibility and
other requirements, and may charge fees and expenses that
may be more or less than those charged by the Direct Plan.
You should consider other investment alternatives before
opening an Account in the Direct Plan.
No Guarantee of Admission to Any Institution
and Related Matters
There is no guarantee or commitment from the State of New
York, the Comptroller, HESC, Ascensus College Savings,
Vanguard, or any other person that: (1) a Beneficiary will be
admitted to any institution (including any Eligible
Educational Institution); (2) upon admission to an institution,
the institution will permit a Beneficiary to continue to attend;
or (3) a Beneficiary will graduate or receive a degree from
any institution. New York State residency for a Beneficiary
will not be established for tax status, financial aid eligibility,
or any other purpose merely because of his or her
designation as a Beneficiary for a Program Account.
Medicaid and Other Federal and State
Noneducational Benefits
The effect of an Account on eligibility for Medicaid or other
state and federal benefits is uncertain. It is possible that an
Account will be viewed as a “countable resource” in
determining an individual’s financial eligibility for Medicaid.
Withdrawals from an Account during certain periods also
may have the effect of delaying the disbursement of
Medicaid payments. You should consult a qualified advisor
to determine how your Account may affect eligibility for
Medicaid or other state and federal noneducational benefits.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 11
Section 4. Opening and Funding Your Account
This section explains how to open an Account with the
Program, choose a Beneficiary, choose your Investment
Options, designate a Successor Account Owner, and
contribute money to an Account. See Section 8. Maintaining
Your Account for details on making changes to your
Account after you set it up.
Who Can Participate
To become an Account Owner in the Direct Plan you
must be:
A U.S. citizen or resident alien; or
A fiduciary or agent for trusts, estates, corporation
companies, partnerships, and associations.
We require each Account Owner to have a Social Security
number or taxpayer identification number and provide a U.S.
permanent street address that is not a post office box.
Minors may become Account Owners; however, a parent
or guardian must complete the Enrollment Application on
their behalf. An emancipated minor must submit a court
order as well as any other documentation that we request,
establishing that he or she is empowered to enter into a
contract without the ability to revoke that contract based
on age.
You do not have to be a New York State resident, and there
are no income restrictions on Account Owners.
No Residency Restriction
You and your Beneficiary don’t need to be New York
State residents to open a Direct Plan Account.
How to Open an Account
To open an Account, you must complete and submit
an Enrollment Application. You can do this in one of
three ways:
• Online: Complete the Enrollment Application at
nysaves.org.
• By mail: Complete, sign, and mail an Enrollment
Application to New York’s 529 College Savings Program
Direct Plan, P.O. Box 55440, Boston, MA 02205-8323.
• By phone: Call 877-NYSAVES (877-697-2837).
By signing the Enrollment Application online or in the paper
format, you agree that your Account is subject to the terms
and conditions of the then-current Tuition Savings
Agreement (contained in this document) as well as to the
description of the Direct Plan in this Disclosure Booklet. We
reserve the right to hold you liable in the event that you
intentionally provide inaccurate information in connection
with your Account.
Questions?
If you have any questions about setting up your Account,
you can get additional information online at nysaves.org
or by calling 877-NYSAVES (877-697-2837).
Once you set up your Account, only you control how that
Account’s assets are invested and used. Although
contributions to the Program are considered completed
gifts to your Beneficiary for federal gift, generation-
skipping, and estate tax purposes, a Beneficiary who is not
the Account Owner has no control over the assets in the
Account. See Designate a Successor Account Owner later
in this section.
Choose a Beneficiary
You will need to select a Beneficiary for the Account on
your Enrollment Application. Your Beneficiary is the future
student. Your Beneficiary does not have to be a New York
State resident; however, he or she must be a U.S. citizen or
resident alien with a valid Social Security number or
taxpayer identification number.
Other considerations when selecting a Beneficiary:
Your Beneficiary can be of any age—newborn to adult.
You may select only one Beneficiary per Account.
You do not have to be related to your Beneficiary.
You may select yourself as Beneficiary.
Choose Investment Options
You may select from a number of Investment Options, which
fall into two categories:
Age-Based Options (three options). The asset allocation of
money invested in any of the Age-Based Options is
automatically adjusted over time to become more
conservative as your Beneficiary approaches college age.
Individual Portfolios (13 options). The asset allocation of
money invested in any of the Individual Portfolios is static;
it does not change over time.
You may choose up to five Investment Options per
contribution and you must allocate a minimum of 5% of the
contribution to each Investment Option you choose. For
details about the Direct Plan’s Investment Options, including
investment objectives, strategies, risks, and performance,
see Section 5. Your Investment Options.
12 Direct Plan Disclosure Booklet and Tuition Savings Agreement
Designate a Successor Account Owner
You should consider designating who will become the
Account Owner if you die. This is optional but recommended
by the Program.
Your Successor Account Owner would take over all of
your rights, title, and interest in an Account (including the
right to change your Beneficiary) upon your death. If you
do not initially designate a Successor Account Owner but
later decide to do so, or if you wish to revoke or change
a designation, you may make the change online at
nysaves.org, by phone at 877-NYSAVES (877-697-2837),
or by mailing the appropriate form. The change will
become effective after your instructions have been
received and processed.
Choose a Successor
Designating a successor now will help you easily make
an ownership transfer to your named successor.
The Successor Account Owner will be required to submit
to the Direct Plan (1) a certified copy of a death certificate
sufficiently identifying you by name and Social Security
number or (2) other proof recognized under applicable
law and acceptable to the Program Administrators before
taking any action regarding the Account following your
death. To complete the transfer, your Successor Account
Owner must also complete a new Enrollment Application
after your death.
The assets of an Account for which you have designated a
Successor Account Owner will not be considered assets of
your testamentary estate and will not be subject to probate
upon your death. If you have not designated a Successor
Account Owner, ownership of your Account and all rights
related to your Account will be determined upon your death
as provided in applicable laws for wills, estates, and intestate
succession. Generally, ownership of the Account will pass
from you upon your death to the executor or administrator
of your estate and, subsequently, to a beneficiary of your
estate by bequest or by operation of law. If you are
concerned with assuring who would exercise control over
your Account upon your death, you should designate a
Successor Account Owner or consult a qualified estate
planning professional.
You should consult with a qualified advisor about the
potential tax and legal consequences of a change in
Account Owner. See Section 7. Federal and New York
State Tax Considerations—Federal Gift and Estate Taxes
for additional information.
Contribute to Your Account
You may contribute to your Direct Plan Account by any of
the following methods: Recurring Contributions, electronic
bank transfer, check, payroll deduction (if your employer
permits payroll deduction), transfer from a Upromise
account, rollover from a non-Program 529 plan, transfer
from another Account in the Direct Plan or the Advisor-
Guided Plan, transfer from an education savings account, or
redemption of a qualified U.S. Savings Bond. We also accept
contributions from custodial accounts under the Uniform
Gifts to Minors Act or the Uniform Transfers to Minors Act
(UGMA/UTMA). You may also receive a minimum gift
contribution of $25 through Ugift. Some of these methods
are discussed in detail later in this section.
Nine Ways to
Contribute to
Your Direct Plan
Account
Recurring
Contributions (also
known as Automatic
Investment Plan (AIP))
Electronic Bank
Transfer (EBT) Check Payroll Deduction
Link your bank
account and the
Direct Plan and
schedule automatic
transfers of a set.
Link your bank
account and the
Direct Plan and
schedule automatic
transfers of a set.
Send a check payable
to New York’s 529
College Savings
Program Direct Plan
to P.O. Box 55440,
Boston, MA 02205-
8323.
Link your Direct Plan
Account to your
employer so a set
amount is taken out
of your paycheck
each pay period.
Upromise Ugift
®
Incoming
Rollover
Contribution From
ESA or Qualified U.S.
Savings Bond
Contribution From
UGMA/UTMA
Link your Direct
Plan Account to the
Upromise rewards
program to earn a
percentage of what
you spend on eligible
everyday purchases.
Give a unique code
to your family and
friends and allow
them to contribute
to your Direct Plan
Account.
Transfer assets from a
529 plan outside the
Program to your
Direct Plan Account.
Contribute to the
Direct Plan from an
education savings
account or by selling
a qualified U.S.
Savings Bond.
Contribute
assets from an
UGMA UTMA
account to your
Direct Plan Account.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 13
Others can make contributions to your Account as well.
However, only you, as the Account Owner, can control how
the Account’s assets are invested and used.
Spousal Contribution
Your spouse can contribute to your Account and those
contributions may be eligible for the New York State tax
deduction if you file a joint New York State income tax
return. However, if a contribution check is from your
spouse’s individual bank account and not an account held
jointly with you, we will generally treat it as a contribution
made by a third party and it may not be deductible from
New York State taxable income by you or your spouse.
Please contact the DTF to see if the contribution qualifies
for a deduction.
Minimum Contributions
The Minimum Contribution, whether to open an Account or
add to an existing Account, is $25 ($15 when investing
through a payroll deduction plan). You may also receive a
minimum gift contribution of $25 through Ugift.
Low Minimum Contribution
The minimum required to open a Direct Plan Account
is $25 ($15 if you have payroll deduction).
Maximum Account Balance
There is no limit on the growth of Accounts. However, you
will not be permitted to make contributions to any Account
for a Beneficiary if the aggregate Account balance, including
the proposed contributions, for that Beneficiary (including
all Direct Plan and Advisor-Guided Plan Accounts for the
same Beneficiary regardless of Account Owner) would
exceed the “Maximum Account Balance.” This limit is
determined periodically by the Program Administrators in
compliance with federal requirements. The Maximum
Account Balance is currently $375,000. Accounts that have
reached the Maximum Account Balance may continue to
accrue earnings, but additional contributions will not be
accepted and will be returned or rejected. The Maximum
Account Balance is based on the aggregate market value of
the Account(s) for a Beneficiary plus the amount of total
Qualified Withdrawals and not solely on the aggregate
contributions made to the Account(s). If, however, the
market value of such Account(s) falls below the Maximum
Account Balance due to market fluctuations and not as a
result of Qualified Withdrawals from such Account(s),
additional contributions will be accepted. We may, in our
discretion, refuse to accept a proposed contribution if we
determine that accepting the contribution would not comply
with federal or New York State requirements. None of the
Associated Persons will be responsible for any loss, damage,
or expense incurred in connection with a rejected or
returned contribution. In the future, the Maximum Account
Balance might be reduced under certain circumstances. To
determine periodically whether the Maximum Account
Balance has changed, log on to nysaves.org.
Impermissible Methods of Contributing
We will not accept contributions made by cash, money
order, credit card, traveler’s check, starter check, foreign
check not in U.S. dollars, third-party personal check in an
amount greater than $10,000, check dated earlier than 180
days before the date of receipt, postdated check, check with
unclear instructions, or any other check the Direct Plan
deems unacceptable. We also will not accept contributions
made with stocks, securities, or other noncash assets.
Allocation of Contributions
You will be asked to designate on your Enrollment
Application how you want your contributions allocated.
You may invest all of your assets in one Investment Option
or allocate your contributions among up to five different
Investment Options. You must allocate a minimum of 5% of
a contribution to each Investment Option you choose. Any
contribution will be invested in accordance with the standing
instructions you have provided for your Account unless you
specify different allocation instructions for a particular
contribution. You may change your instructions with respect
to future contributions at any time: online at nysaves.org, by
phone at 877-NYSAVES (877-697-2837), or by submitting
the appropriate form.
Recurring Contributions (also known as Automatic
Investment Plan (AIP))
You may contribute to your Account through periodic
automated debits from a checking or savings account if your
bank is a member of the Automated Clearing House, subject
to certain processing restrictions. To initiate a Recurring
Contribution during enrollment, you must complete the
appropriate section of the Enrollment Application. Paper-
based Enrollment Applications must be accompanied by
appropriate checking or savings account information. You
also may set up a Recurring Contribution after an Account
has been established, either online at nysaves.org or by
submitting the appropriate form.
There is no charge for establishing or maintaining Recurring
Contributions. Your bank account will be debited on the
day you designate, or the 10th of each month if no
designation is made, provided the day is a regular business
day. If the day you designate falls on a weekend or a holiday,
the debit for your Recurring Contribution will occur on
the next business day.
Your trade date (or the date your purchase is effective) will
be the business day prior to your designated date. See
Section 5. Your Investment Options—Pricing of Portfolio
Units and Trade Date Policies. If you indicate a start date
that is within the first four days of the month, there is a
chance that your investment will be credited on the last
business day of the previous month. Please note that
Recurring Contributions with a debit date of January 1, 2, 3,
or 4 will be credited in the same year as the debit date.
Authorization to perform automated periodic deposits will
remain in effect until we have received notification of its
termination. Either you or we may terminate your Recurring
Contributions at any time. To be effective, we must receive a
change to, or termination of, your Recurring Contributions at
least five business days before the next debit for your
14 Direct Plan Disclosure Booklet and Tuition Savings Agreement
Recurring Contribution is scheduled to be deducted from
your bank account and is not effective until we receive and
process the contribution.
If your Recurring Contribution cannot be processed because
the bank account on which it is drawn contains insufficient
funds or because of incomplete or inaccurate information,
or if the transaction would violate processing restrictions,
we reserve the right to suspend processing of future
Recurring Contributions.
A program of regular investment cannot ensure a profit
or protect against a loss.
Electronic Bank Transfer (EBT)
You may contribute to your Account by authorizing us to
withdraw money by EBT from your bank checking or
savings account, subject to certain processing restrictions.
To authorize an EBT, you must be the account owner of the
bank account and must provide certain information about
the account from which funds will be withdrawn (the same
information required to establish a Recurring Contribution).
Once you have provided that information, you may request
an EBT from the designated bank account to your Account,
online at nysaves.org or by phone at 877-NYSAVES
(877-697-2837).
There is no charge for requesting an EBT. If your EBT cannot
be processed because the bank account on which it is
drawn contains insufficient funds or because of incomplete
or inaccurate information, or if the transaction would violate
processing restrictions, we reserve the right to suspend
processing of future EBT contributions.
We may place a limit on the total dollar amount per day you
may contribute to an Account by EBT. Contributions in
excess of such limit will be rejected or returned. If you plan
to contribute a large dollar amount to your Account by EBT,
you may want to contact the Direct Plan to inquire about
the current limit prior to making your contribution.
Contributions by Check
Please make all checks payable to New York’s 529 College
Savings Program Direct Plan and send them to the following
address: P.O. Box 55440, Boston, MA 02205-8323. For
established Accounts, please include your Account number
on the check. Family and friends are permitted to contribute
directly to your existing Account by making checks payable
to New York’s 529 College Savings Program Direct Plan.
Family and friends may also contribute by check through
Ugift as described in this section. Any check that is made
payable to you or your Beneficiary that you or your
Beneficiary then endorse to the Direct Plan cannot exceed
$10,000. Contributions to an Account by third parties are
not generally deductible from New York State taxable
income by the third party or the Account Owner. Please
contact the DTF to see if the contribution qualifies for
a deduction.
Contributions by Payroll Deduction
You may be eligible to make automatic contributions to your
Account through payroll deduction, provided your employer
has agreed to offer this service. The minimum initial and
subsequent employer Recurring Contribution is $15.
Contributions by payroll deduction will be permitted only
from employers able to meet the Direct Plan’s operational
and administrative requirements for payroll deductions.
Please check with your employer to see whether you
are eligible to contribute to the Direct Plan through
payroll deduction.
Upromise
We make saving for college easier with Upromise, a
rewards service that gives back a percentage of your
eligible spending with hundreds of America’s leading
companies as college savings. Once you enroll in the
Direct Plan, your Account can be linked to your Upromise
account so that rewards savings accumulated in your
Upromise account are automatically transferred to your
Account on a periodic basis. The minimum amount for an
automatic transfer from a Upromise account to your
Account is $25. You may be eligible to deduct all or a
portion of your rewards savings transferred to your
Account from your New York State adjusted gross
income. See Section 7. Federal and New York State Tax
Considerations—New York State Tax Consequences.
Upromise is offered by Upromise, Inc., and this Disclosure
Booklet is not intended to provide detailed information
concerning the service. Upromise is administered in
accordance with the terms and procedures set forth in the
Upromise Member Agreement (as amended from time to
time), which is available on the Upromise website. If you
want more information about Upromise, please visit
upromise.com.
Ugift
You may invite family and friends to contribute to your
Account through Ugift, a Direct Plan feature, to provide a
gift to your Beneficiary. You provide a unique contribution
code to selected family and friends, and gift givers can
either contribute online through an electronic bank transfer
or by mailing in a gift contribution coupon with a check
made payable to Ugift—New York’s 529 College Savings
Program Direct Plan. The minimum Ugift contribution is $25.
Gift contributions received in good order will be held for
approximately five business days before being transferred to
your Account. Gift contributions through Ugift are subject to
the Maximum Account Balance and daily contribution limit
requirements of the Direct Plan. Gift contributions will be
invested according to the allocation on file for your Account
at the time the gift contribution is transferred. There may be
potential tax consequences of gift contributions to your
Account. You and the gift giver should consult a tax advisor
for more information. For more information about Ugift, visit
nysaves.org or call us at 877-NYSAVES (877-697-2837).
Direct Plan Disclosure Booklet and Tuition Savings Agreement 15
Incoming Rollover Contributions
You can contribute to your Account with money transferred
from a 529 plan outside of the Program. This transaction is
known as a “Rollover.” You may roll over assets from an
account in a non-Program 529 plan to your Account for the
same Beneficiary without federal income tax consequences
(including the Federal Penalty) if you do so after 12 months
from the date of a previous rollover for the same Beneficiary
to any Qualified Tuition Program. You may also roll over
money from a non-Program 529 plan to your Account
without federal income tax consequences at any time when
you change Beneficiaries, provided that the new Beneficiary
is a “Member of the Family” of the old Beneficiary as
described in Section 8. Maintaining Your Account—
Substituting Beneficiaries. A 529 plan Rollover that does not
meet these criteria will be considered a Nonqualified
Withdrawal that is subject to federal and applicable state
income tax and the Federal Penalty. See Section 9.
Withdrawing From Your Account—Withdrawals: Qualified
and Nonqualified and Section 7. Federal and New York State
Tax Considerations.
Incoming Rollovers can be direct or indirect. Direct Rollovers
involve the transfer of money from a 529 plan outside of the
Program directly to the Program. Indirect Rollovers involve
the transfer of money from an account in a 529 plan outside
of the Program to the Account Owner, who then contributes
the money to an Account in the Program. To avoid federal
income tax consequences, money you receive in an Indirect
Rollover must be contributed to your Account within 60
days of the withdrawal. You may be eligible to deduct all or
a portion of the Rollover from your New York State adjusted
gross income. See Section 7. Federal and New York State
Tax Considerations. You should be aware that not all 529
plans outside of the Program permit Direct Rollovers. In
addition, there may be state income tax consequences (and
in some cases penalties) resulting from a Rollover out of a
state’s 529 plan.
You can roll over assets to the Program, directly (if
permitted by your current 529 plan outside of the Program)
or indirectly, either as an initial contribution when you open
an Account or as an additional contribution to an existing
Account. When making a Rollover, you will need to provide
us with documentation from the distributing 529 plan
account indicating the portion of the withdrawal attributable
to earnings.
Until we receive this documentation, the entire amount
of the Rollover will be treated as earnings, which would
be subject to taxation in the case of a Nonqualified
Withdrawal. See Section 7. Federal and New York State
Tax Considerations.
Contributions From an Education Savings Account or
Qualified U.S. Savings Bond
You can contribute to your Account with proceeds
from the sale of assets held in an education savings
account or a qualified U.S. Savings Bond (Qualified
Savings Bond). You will need to provide the Program
with the following documentation:
For assets from an education savings account, an account
statement or other documentation from the custodial
financial institution showing the total amount contributed
and the proportion of the assets that represents earnings.
For assets obtained by redeeming a Qualified Savings
Bond, an account statement, Form 1099-INT, or other
documentation from the financial institution that
redeemed the bond showing the proportion of the assets
that represents earnings.
Until we receive this documentation, the entire amount
of the contribution will be treated as earnings, which
would be subject to taxation in the case of a Nonqualified
Withdrawal. See Section 7. Federal and New York State
Tax Considerations.
Contributions From UGMA/UTMA Custodial
Accounts
If you are the custodian of an UGMA/UTMA account, you
may be able to open an Account using custodial assets
previously held in the UGMA/UTMA account, subject to the
laws of the state where you opened the UGMA/UTMA
account. As custodian, you will act as the Account Owner.
As custodian, you may incur capital gains (or losses) from
the sale of noncash assets held in the UGMA/UTMA account.
You should consult a qualified tax advisor with respect to
the contribution of UGMA/UTMA custodial assets and the
implications of such a contribution. As an UGMA/UTMA
custodian, you should consider the following:
You may make withdrawals from the Account only as
permitted under applicable UGMA/UTMA law as in effect
in the state under which the UGMA/UTMA account was
established, and under the policies and rules of the
Direct Plan;
You may not select a new Beneficiary (directly or by
means of a Rollover), except as permitted under
applicable UGMA/UTMA law;
You should not change the Account Owner to anyone
other than a successor custodian during the term of the
custodial account under applicable UGMA/UTMA law;
• When the custodianship terminates, your Beneficiary is
legally entitled to take control of the Account and may
become the Account Owner;
• You should consider whether additional contributions of
money not previously gifted to the Beneficiary under
UGMA/UTMA should be made to a separate and
noncustodial Account. (A noncustodial Account will allow
the Account Owner to retain control of the assets and
make Beneficiary changes.); and
The Associated Persons are not liable for any
consequences related to an UGMA/UTMA
custodian’s improper use, transfer, or
characterization of custodial funds.
16 Direct Plan Disclosure Booklet and Tuition Savings Agreement
Section 5. Your Investment Options
In this section, you will find information about your
Investment Options, including a discussion of the Age-
Based Options and the Individual Portfolios. You should
consider the information carefully before choosing to
invest in one or more of these Investment Options.
Information related to each Portfolio’s strategy and
risks has been provided by Vanguard and has not been
independently verified by the Program Administrators, who
make no representation as to the information’s accuracy or
completeness.
Summary of Investment Options
The Direct Plan offers multiple Investment Options intended
to help you save for Qualified Higher-Education Expenses.
Each Investment Option corresponds to a Portfolio or series
of Portfolios, and each Portfolio invests your contributions in
one or more Underlying Funds managed by Vanguard.
Please keep in mind that as an Account Owner, you will not
directly own shares of or interests in the Underlying Funds.
Investments—at a Glance
Currently, you can select from:
3 Age-Based Options that become more conservative
as your Beneficiary nears college age.
13 Individual Portfolios that invest in stock funds, bond
funds, insurance company funding agreements, and
combinations of those funds.
Age-Based Options
You can choose from among three Age-Based Options,
which automatically move your assets to progressively
more conservative Portfolios as your Beneficiary
approaches college age. You can select the option—
conservative, moderate, or aggressive—that best
reflects your risk tolerance.
3. Select your investments
Review the available investment options, which cover all major asset classes—stocks,
bonds, can select up to 5 investments per account.
We oer 3 age-based options. As your child nears college age, each option will gr
adually
move aggressive investments, mostly stocks , to investments balanced between stocks
and bonds,investments, bonds and short-term reserves .
See our age-based options.
Stock portfolios
Balanced portfolios
Bond and short-term
reserve portfolios
More aggressive
(more risk/reward)
More conservative
(less risk/reward)
Individual Portfolio Options
You can choose from among various Individual Portfolios,
which invest in stock funds, bond funds, insurance company
funding agreements, and combinations thereof. If you
choose an Individual Portfolio, your money will remain in
that Portfolio until you instruct the Program to move it.
Whenever you contribute money to your Account, you
may allocate the contribution among a maximum of five
Investment Options. For example, you may choose five
Individual Portfolios, or one Age-Based Option and four
Individual Portfolios.
Regardless of how many Investment Options you select,
you must allocate a minimum of 5% of your contributions
to each. For example, you could choose three Investment
Options and allocate your contributions 60%/35%/5%.
The Program Administrators reserve the right to change, at
any time and without prior notice, the Investment Options,
the Portfolios included in the Age-Based Options, the
asset allocation of the Individual Portfolios, or the
Underlying Funds in which the Portfolios invest.
In accordance with the Management Agreement and certain
related agreements, the Program Administrators reserve
the right to change the Program Manager and the Direct
Plan Investment Manager. See Section 3. Your Risks—
Potential Changes to the Program, Program Manager,
and Investment Manager.
Note: The investment time horizon for college investing
is expected to be very short relative to that for retirement
investing (i.e., 5 to 20 years versus 30 to 60 years). Also,
the need for liquidity during the withdrawal phase (to
pay for certain educational expenses) generally is very
important. You should seriously consider the level of
risk you wish to assume, your investment time horizon,
and other factors important to you before you select
Investment Options. You should periodically assess and,
if appropriate, adjust your investment choices with the
same factors in mind.
Note also that none of the Age-Based Options, the Multi-
Fund Individual Portfolios, the Program, the State, the
Program Administrators, Ascensus College Savings, or
Vanguard can offer any assurance that the recommended
asset allocations will maximize returns, minimize risk, or be
the appropriate allocation in all circumstances for every
investor who has a particular time horizon or risk tolerance.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 17
Age-Based Options
You may choose from the following three Age-Based
Options:
Conservative Age-Based Option
Moderate Age-Based Option
Aggressive Age-Based Option
These Age-Based Options are designed to take into account
a Beneficiary’s age and your investing time horizon—i.e., the
number of years before your Beneficiary is expected to
attend college. Within the Age-Based Options, you may
invest according to your risk tolerance, in a conservative, a
moderate, or an aggressive asset allocation. In general, for
younger Beneficiaries, the Age-Based Options will be
invested in Portfolios that are more heavily weighted in
stocks to take advantage of the relatively long period of
investment in order to try to maximize returns. As time
passes, Account assets are automatically moved to more
conservative Portfolios in an attempt to preserve capital as
your Beneficiary approaches college age. We have designed
the Direct Plan for you to closely match the Age-Based
Options within your Beneficiary’s age range. However, you
may choose different Age-Based Options depending on
your individual circumstances.
As shown in the table on the following page, for any
particular age group, the Conservative Age-Based Option
usually has a higher concentration of assets in bond funds
and/or short-term reserves than does the Moderate
Age-Based Option. The same is true for the Moderate
Age-Based Option in comparison with the Aggressive
Age-Based Option. Portfolios with higher allocations to
bond funds and short-term reserves tend to be less volatile
than those with higher stock allocations. Less-volatile
Portfolios generally will not decline as much when stock
markets go down but also will not appreciate in value as
much when stock markets go up. Each of the Portfolios
included in the Age-Based Options invests in a combination
of Underlying Funds in the percentages shown in the table.
Each of these Portfolios is also offered as an Individual
Portfolio. For a description of each of these Portfolios, see
Individual Portfolio Options later in this section.
18 Direct Plan Disclosure Booklet and Tuition Savings Agreement
With the Age-Based Options, we automatically exchange assets from one Portfolio to another as your Beneficiary ages. The
exchange takes place annually during the month following the month of your Beneficiary’s birth date, according to the
following schedule:
Conservative
Moderate Growth
Portfolio
Conservative Growth
Portfolio
Income Portfolio Income Portfolio Interest Accumulation
Portfolio
50% Stock
50% Bond
25% Stock
75% Bond
75% Bond
25% Short-Term
Investments
75% Bond
25% Short-Term
Investments
100% Short-Term
Investments
Age 0-5 Age 6-10 Age 11-15 Age 16-18 Age 19 and up
Moderate
Growth Portfolio Moderate Growth
Portfolio
Conservative Growth
Portfolio
Income Portfolio Income Portfolio
75% Stock
25% Bond
50% Stock
50% Bond
25% Stock
75% Bond
75% Bond
25% Short-Term
Investments
75% Bond
25% Short-Term
Investments
Age 0-5 Age 6-10 Age 11-15 Age 16-18 Age 19 and up
Aggressive
Aggressive Growth
Portfolio
Growth Portfolio Moderate Growth
Portfolio
Conservative Growth
Portfolio
Income Portfolio
100% Stock
75% Stock
25% Bond
50% Stock
50% Bond
25% Stock
75% Bond
75% Bond
25% Short-Term
Investments
Age 0-5 Age 6-10 Age 11-15 Age 16-18 Age 19 and up
n Stock funds n Bond funds n Short-term investments
Note: A Portfolio’s investment in short-term investments generally includes, but is not limited to, very short-term debt securities such as
interest-bearing bank deposits, money market instruments, U.S. Treasury bills, short-term bonds, and funding agreements issued by one or
more insurance companies.
More Aggressive
More Conservative
More Aggressive
More Conservative
More Aggressive More Conservative
Age 0–5
Age 0–5
Age 0–5
Age 6–10
Age 6–10
Age 6–10
Age 11–15
Age 11–15
Age 11–15
Age 16–18
Age 16–18
Age 16–18
Age 19 and up
Age 19 and up
Age 19 and up
Direct Plan Disclosure Booklet and Tuition Savings Agreement 19
Individual Portfolio Options
Unlike the Age-Based Options, the Individual Portfolios
do not change asset allocations as your Beneficiary ages.
Instead, the asset allocation of each Portfolio remains
fixed over time.
If you choose to invest in Individual Portfolios that have
a significant weighting in stocks, you should consider
moving your assets to more conservative Portfolios as
your Beneficiary approaches college age. Please note that
there are limitations on your ability to move assets from
one Portfolio to another. You can make changes to your
Investment Options or allocation percentages twice per
calendar year per Beneficiary. Additional changes or a
transfer of assets within a calendar year may be subject
to federal, state, and other taxes.
The Individual Portfolios consist of five Multi-Fund Individual
Portfolios, which invest in multiple Underlying Funds, and
eight Single-Fund Individual Portfolios, each of which invests
in a single Underlying Fund.
Multi-Fund Individual Portfolios
Aggressive Growth Portfolio
Growth Portfolio
Moderate Growth Portfolio
Conservative Growth Portfolio
Income Portfolio
Single-Fund Individual Portfolios
Developed Markets Index Portfolio
Growth Stock Index Portfolio
Value Stock Index Portfolio
Mid-Cap Stock Index Portfolio
Small-Cap Stock Index Portfolio
Bond Market Index Portfolio
Inflation-Protected Securities Portfolio
Interest Accumulation Portfolio
Additional Information about the Underlying
Funds and the Portfolios
Requesting Additional Information About the
Underlying Funds
Your contributions to a Portfolio will be invested in one or
more of the Underlying Funds. Please keep in mind that you
will not own shares of or interests in the Underlying Funds.
Instead, you will own interests in the Trust. Additional
information about the investment strategies and risks of
each Underlying Fund, except for Vanguard Short-Term
Reserves Account, is available in its current prospectus and
statement of additional information. You can request a copy
of the current prospectus, the statement of additional
information, or the most recent semiannual or annual report
of an Underlying Fund by visiting Vanguard’s website at
vanguard.com or by calling 877-NYSAVES (877-697-2837).
Information about Vanguard Total Bond Market II Index
Fund can be found on Vanguard’s Institutional Investors
website. Vanguard Short-Term Reserves Account is not a
mutual fund. Therefore, there is no prospectus or statement
of additional information available. However, information
about Vanguard Short-Term Reserves Account can be
found later in this section under Single-Fund Individual
Portfolios—Interest Accumulation Portfolio.
The Target Indexes of the Underlying Funds
May Change
All of the Underlying Funds, except Vanguard Inflation-
Protected Securities Fund and Vanguard Short-Term
Reserves Account, are index funds. Each index fund reserves
the right to substitute a different index for the index it
currently tracks if the current index is discontinued, if the
Underlying Fund’s agreement with the sponsor of its target
index is terminated, or for any other reason determined in
good faith by the Underlying Fund’s board of trustees. In
any such instance, a substitute index would measure the
same market segment as the current index.
20 Direct Plan Disclosure Booklet and Tuition Savings Agreement
Multi-Fund Individual Portfolios
Aggressive Growth Portfolio
Investment Objective
The Portfolio seeks to provide capital appreciation.
Investment Strategy
The Portfolio invests in two Vanguard stock index funds,
resulting in an allocation of 70% of its assets to U.S. stocks,
and 30% of its assets to non-U.S. stocks. The percentages of
the Portfolio’s assets allocated to each Underlying Fund are:
n 70%
Vanguard Institutional Total Stock
Market Index Fund
n 30%
Vanguard Total International Stock
Index Fund
Through its investment in Vanguard Institutional Total Stock
Market Index Fund, the Portfolio indirectly invests in
primarily large-capitalization U.S. stocks and, to a lesser
extent, mid-, small-, and micro-capitalization U.S. stocks. The
fund’s target index represents approximately 100% of the
investable U.S. stock market.
Through its investment in Vanguard Total International
Stock Index Fund, the Portfolio indirectly invests in
international stocks. The Fund is designed to track the
performance of the FTSE Global All Cap ex US Index, a
free-float-adjusted market-capitalization weighted index
designed to measure equity market performance of
companies located in developed and emerging markets,
excluding the United States. The index includes more than
5,500 stocks of companies located in 46 countries.
Investment Risks
The Portfolio primarily is subject to stock market risk. The
Portfolio also has low levels of country/regional risk,
currency risk, emerging markets risk, index sampling risk,
and derivatives risk.
Growth Portfolio
Investment Objective
The Portfolio seeks to provide capital appreciation and low
to moderate current income.
Investment Strategy
The Portfolio invests in two Vanguard stock index funds
and two Vanguard bond index funds, resulting in an
allocation of 52.5% of its assets to U.S. stocks, 22.5% of its
assets to non-U.S. stocks, 20% of its assets to investment-
grade U.S. bonds, and 5% of its assets to investment-grade
non-U.S. bonds. The percentages of the Portfolio’s assets
allocated to each Underlying Fund are:
n 52.5%
Vanguard Institutional Total Stock Market
Index Fund
n 22.5%
Vanguard International Stock Index Fund
n 20%
Vanguard Total Bond Market II Index Fund
n 5%
Vanguard Total International Bond
Index Fund
Through its investment in Vanguard Institutional Total
Stock Market Index Fund, the Portfolio indirectly invests
in primarily large-capitalization U.S. stocks and, to a lesser
extent, mid-, small-, and micro-capitalization U.S. stocks.
The Fund’s target index represents approximately 100%
of the investable U.S. stock market.
Through its investment in Vanguard Total International
Stock Index Fund, the Portfolio indirectly invests in
international stocks. The Fund is designed to track the
performance of the FTSE Global All Cap ex US Index, a
free-float-adjusted market-capitalization-weighted index
designed to measure equity market performance of
companies located in developed and emerging markets,
excluding the United States. The index includes more than
5,500 stocks of companies located in 46 countries.
Through its investment in Vanguard Total Bond Market II
Index Fund, the Portfolio indirectly invests in a broadly
diversified collection of securities that, in the aggregate,
approximates the Barclays U.S. Aggregate Float Adjusted
Index in terms of key risk factors and other characteristics.
The index measures a wide spectrum of public, investment-
grade, taxable fixed income securities in the United States—
including government, corporate, and international dollar-
denominated bonds, as well as mortgage-backed and
asset-backed securities—all with maturities of more than
1 year. The Fund maintains a dollar-weighted average
maturity consistent with that of the index, which generally
ranges between 5 and 10 years.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 21
Through its investment in Vanguard Total International
Bond Index Fund, the Portfolio indirectly invests in
government, government agency, corporate, and securitized
non-U.S. investment-grade fixed income investments, all
issued in currencies other than the U.S. dollar and with
maturities of more than one year. To minimize the currency
risk associated with investments in bonds denominated in
currencies other than the U.S. dollar, the Fund attempts to
hedge its currency exposures.
Investment Risks
Because it invests mainly in stock funds, the Portfolio
primarily is subject to stock market risk. Through its
bond fund holdings, the Portfolio has moderate levels of
interest rate risk, income risk, call risk, prepayment risk,
and extension risk. The Portfolio also has low to moderate
levels of country/regional risk, currency risk, and emerging
markets risk and low levels of credit risk, index sampling
risk, currency hedging risk, nondiversification risk, and
derivatives risk.
Moderate Growth Portfolio
Investment Objective
The Portfolio seeks to provide capital appreciation and
current income.
Investment Strategy
The Portfolio invests in two Vanguard stock index funds and
two Vanguard bond index funds, resulting in an allocation of
35% of its assets to U.S. stocks, 15% of its assets to non-U.S.
stocks, 40% of its assets to investment-grade U.S. bonds,
and 10% of its assets to investment-grade non-U.S. bonds.
The percentages of the Portfolio’s assets allocated to each
Underlying Fund are:
n 35%
Vanguard Institutional Total Stock Market
Index Fund
n 15%
Vanguard International Stock Index Fund
n 40%
Vanguard Total Bond Market II Index Fund
n 10%
Vanguard Total International Bond
Index Fund
Through its investment in Vanguard Institutional Total
Stock Market Index Fund, the Portfolio indirectly invests
in primarily large-capitalization U.S. stocks and, to a lesser
extent, mid-, small-, and micro-capitalization U.S. stocks.
The Fund’s target index represents approximately 100%
of the investable U.S. stock market.
Through its investment in Vanguard Total International
Stock Index Fund, the Portfolio indirectly invests in
international stocks. The Fund is designed to track the
performance of the FTSE Global All Cap ex US Index, a
free-float-adjusted market-capitalization weighted index
designed to measure equity market performance of
companies located in developed and emerging markets,
excluding the United States. The index includes more than
5,500 stocks of companies located in 46 countries.
Through its investment in Vanguard Total Bond Market II
Index Fund, the Portfolio indirectly invests in a broadly
diversified collection of securities that, in the aggregate,
approximates the Barclays U.S. Aggregate Float Adjusted
Index in terms of key risk factors and other characteristics.
The index measures a wide spectrum of public, investment-
grade, taxable fixed income securities in the United States—
including government, corporate, and international dollar-
denominated bonds, as well as mortgage-backed and
asset-backed securities—all with maturities of more than 1
year. The Fund maintains a dollar-weighted average
maturity consistent with that of the index, which generally
ranges between 5 and 10 years.
Through its investment in Vanguard Total International Bond
Index Fund, the Portfolio indirectly invests in government,
government agency, corporate, and securitized non-U.S.
investment-grade fixed income investments, all issued in
currencies other than the U.S. dollar and with maturities
of more than one year. To minimize the currency risk
associated with investments in bonds denominated in
currencies other than the U.S. dollar, the Fund attempts
to hedge its currency exposures.
22 Direct Plan Disclosure Booklet and Tuition Savings Agreement
Investment Risks
Through its stock fund holdings, the Portfolio is subject
to stock market risk. Through its bond fund holdings, the
Portfolio has moderate levels of interest rate risk, income
risk, call risk, prepayment risk, and extension risk. The
Portfolio also has low levels of credit risk, country/regional
risk, currency risk, emerging markets risk, index sampling
risk, currency hedging risk, nondiversification risk, and
derivatives risk.
Conservative Growth Portfolio
Investment Objective
The Portfolio seeks to provide current income and low to
moderate capital appreciation.
Investment Strategy
The Portfolio invests in two Vanguard bond index funds and
two Vanguard stock index funds, resulting in an allocation of
60% of its assets to investment-grade U.S. bonds, 15% of its
assets to investment-grade non-U.S. bonds, 7.5% of its
assets to U.S. stocks, and 7.5% of its assets to non-U.S.
stocks. The percentages of the Portfolio’s assets allocated to
each Underlying Fund are:
n 60%
Vanguard Total Bond Market II Index Fund
n 17.5%
Vanguard Institutional Total Stock Market
Index Fund
n 15%
Vanguard Total International Bond
Index Fund
n 7.5%
Vanguard Total International Stock
Index Fund
Through its investment in Vanguard Total Bond Market II
Index Fund, the Portfolio indirectly invests in a broadly
diversified collection of securities that, in the aggregate,
approximates the Barclays U.S. Aggregate Float Adjusted
Index in terms of key risk factors and other characteristics.
The index measures a wide spectrum of public, investment-
grade, taxable fixed income securities in the United States—
including government, corporate, and international dollar-
denominated bonds, as well as mortgage-backed and
asset-backed securities—all with maturities of more than 1
year. The Fund maintains a dollar-weighted average
maturity consistent with that of the index, which generally
ranges between 5 and 10 years.
Through its investment in Vanguard Total International Bond
Index Fund, the Portfolio indirectly invests in government,
government agency, corporate, and securitized non-U.S.
investment-grade fixed income investments, all issued in
currencies other than the U.S. dollar and with maturities of
more than one year. To minimize the currency risk
associated with investments in bonds denominated in
currencies other than the U.S. dollar, the fund attempts to
hedge its currency exposures.
Through its investment in Vanguard Institutional Total Stock
Market Index Fund, the Portfolio indirectly invests primarily
in large-capitalization U.S. stocks and, to a lesser extent,
mid-, small-, and micro-capitalization U.S. stocks. The Fund’s
target index represents approximately 100% of the
investable U.S. stock market.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 23
Through its investment in Vanguard Total International
Stock Index Fund, the Portfolio indirectly invests in
international stocks. The Fund is designed to track the
performance of the FTSE Global All Cap ex US Index, a
free-float-adjusted market-capitalization weighted index
designed to measure equity market performance of
companies located in developed and emerging markets,
excluding the United States. The index includes more than
5,500 stocks of companies located in 46 countries.
Investment Risks
Because it invests mainly in bond funds, the Portfolio
primarily is subject to moderate levels of interest rate risk,
income risk, call risk, prepayment risk, and extension risk.
Through its stock fund holdings, the Portfolio is subject to
stock market risk. The Portfolio also has low levels of credit
risk, country/regional risk, currency risk, emerging markets
risk, index sampling risk, currency hedging risk,
nondiversification risk, and derivatives risk.
Income Portfolio
Investment Objective
The Portfolio seeks to provide current income.
Investment Strategy
The Portfolio invests in three Vanguard bond funds and one
Vanguard short-term reserves account, resulting in an
allocation of 60% of its assets to investment-grade U.S.
bonds, 15% of its assets to investment-grade non-U.S. bonds,
and 25% of its assets to short-term investments. The
percentages of the Portfolio’s assets allocated to each
Underlying Fund are:
n 42%
Vanguard Total Bond Market II Index Fund
n 25%
Vanguard Short-Term Reserves Account
n 18%
Vanguard Short-Term Inflation-Protected
Securities Index Fund
n 15%
Vanguard Total International Bond
Index Fund
Through its investment in Vanguard Total Bond Market II
Index Fund, the Portfolio indirectly invests in a broadly
diversified collection of securities that, in the aggregate,
approximates the Barclays U.S. Aggregate Float Adjusted
Index in terms of key risk factors and other characteristics.
The index measures a wide spectrum of public, investment-
grade, taxable fixed income securities in the United States—
including government, corporate, and international dollar-
denominated bonds, as well as mortgage-backed and
asset-backed securities—all with maturities of more than 1
year. The Fund maintains a dollar-weighted average
maturity consistent with that of the index, which generally
ranges between 5 and 10 years.
Through its investment in Vanguard Total International Bond
Index Fund, the Portfolio indirectly invests in government,
government agency, corporate, and securitized non-U.S.
investment-grade fixed income investments, all issued in
currencies other than the U.S. dollar and with maturities of
more than one year. To minimize the currency risk
associated with investments in bonds denominated in
currencies other than the U.S. dollar, the fund attempts to
hedge its currency exposures.
Through its investment in Vanguard Short-Term Inflation-
Protected Securities Index Fund, the Portfolio indirectly
invests in inflation protected public obligations issued by the
U.S. Treasury with remaining maturities of less than 5 years.
The Fund maintains a dollar-weighted average maturity
consistent with that of the target index, which generally
does not exceed 3 years.
Through its investment in Vanguard Short-Term Reserves
Account, the Portfolio indirectly invests in funding
agreements issued by one or more insurance companies,
synthetic investment contracts, as well as shares of
Vanguard Federal Money Market Fund. Funding agreements
are interest-bearing contracts that are structured to
preserve principal and accumulate interest earnings over the
life of the investment. The agreements pay interest at a fixed
minimum rate and have fixed maturity dates that normally
range from 2 to 5 years. Vanguard Federal Money Market
24 Direct Plan Disclosure Booklet and Tuition Savings Agreement
Fund invests in high-quality, short-term money market
instruments issued by the U.S. government and its agencies
and instrumentalities.
For more information about Vanguard Short-Term Reserves
Account, please see the Interest Accumulation Portfolio
profile later in this section
Investment Risks
Because it invests mainly in bond funds, the Portfolio
primarily is subject to low to moderate levels of interest rate
risk, income risk, call risk, prepayment risk, extension risk,
and income fluctuation risk. The Portfolio also has low levels
of credit risk, manager risk, index sampling risk, currency
hedging risk, nondiversification risk, and derivatives risk.
Single-Fund Individual Portfolios
Developed Markets Index Portfolio
Investment Objective
The Portfolio seeks to track the performance of a
benchmark index that measures the investment return of
stocks issued by companies located in Canada and the
major markets of Europe and the Pacific region.
n 100%
Vanguard Developed Markets
Index Fund
Investment Strategy
The Portfolio invests 100% of its assets in Vanguard
Developed Markets Index Fund, which employs an indexing
investment approach designed to track the performance of
the FTSE Developed All Cap ex US Index. The FTSE
Developed All Cap ex US Index includes approximately
3,700 common stocks of large-, mid-, and small-cap
companies located in Canada and the major markets of
Europe and the Pacific region. The Fund invests by sampling
the index, meaning that it holds a broadly diversified
collection of securities that, in the aggregate, approximates
the index in terms of key characteristics. These key
characteristics include industry weightings and market
capitalization, as well as certain financial measures, such as
price/earnings ratio and dividend yield.
Investment Risks
The Portfolio primarily is subject to stock market risk,
country/regional risk, and currency risk. The Portfolio also
has low levels of index sampling risk and derivatives risk.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 25
Growth Stock Index Portfolio
Investment Objective
The Portfolio seeks to track the performance of a
benchmark index that measures the investment return of
large-capitalization growth stocks.
n 100%
Vanguard Growth Index Fund
Investment Strategy
The Portfolio invests 100% of its assets in Vanguard Growth
Index Fund, which employs an indexing investment
approach designed to track the performance of the CRSP
US Large Cap Growth Index, a broadly diversified index
predominantly made up of growth stocks of large U.S.
companies. The Fund attempts to replicate the target index
by investing all, or substantially all, of its assets in the stocks
that make up the index, holding each stock in approximately
the same proportion as its weighting in the index.
Investment Risks
The Portfolio primarily is subject to stock market risk and
investment style risk. The Portfolio also has a low level of
derivatives risk.
Value Stock Index Portfolio
Investment Objective
The Portfolio seeks to track the performance of a
benchmark index that measures the investment return of
large-capitalization value stocks.
n 100%
Vanguard Value Index Fund
Investment Strategy
The Portfolio invests 100% of its assets in Vanguard Value
Index Fund, which employs an indexing investment
approach designed to track the performance of the CRSP
US Large Cap Value Index, a broadly diversified index
predominantly made up of value stocks of large U.S.
companies. The Fund attempts to replicate the target index
by investing all, or substantially all, of its assets in the stocks
that make up the index, holding each stock in approximately
the same proportion as its weighting in the index.
Investment Risks
The Portfolio primarily is subject to stock market risk and
investment style risk. The Portfolio also has a low level of
derivatives risk.
26 Direct Plan Disclosure Booklet and Tuition Savings Agreement
Mid-Cap Stock Index Portfolio
Investment Objective
The Portfolio seeks to track the performance of a
benchmark index that measures the investment return of
mid-capitalization stocks.
n 100%
Vanguard Mid-Cap Index Fund
Investment Strategy
The Portfolio invests 100% of its assets in Vanguard Mid-Cap
Index Fund, which employs an indexing investment
approach designed to track the performance of the CRSP
US Mid Cap Index, a broadly diversified index of stocks of
mid-size U.S. companies. The Fund attempts to replicate the
target index by investing all, or substantially all, of its assets
in the stocks that make up the index, holding each stock in
approximately the same proportion as its weighting in the
index.
Investment Risks
The Portfolio primarily is subject to stock market risk and
investment style risk. The Portfolio also has a low level of
derivatives risk.
Small-Cap Stock Index Portfolio
Investment Objective
The Portfolio seeks to track the performance of a
benchmark index that measures the investment return of
small-capitalization stocks.
n 100%
Vanguard Small-Cap Index Fund
Investment Strategy
The Portfolio invests 100% of its assets in Vanguard Small-
Cap Index Fund, which employs an indexing investment
approach designed to track the performance of the CRSP
US Small Cap Index, a broadly diversified index of stocks of
smaller U.S. companies. The Fund attempts to replicate the
target index by investing all, or substantially all, of its assets
in the stocks that make up the index, holding each stock in
approximately the same proportion as its weighting in the
index.
Investment Risks
The Portfolio primarily is subject to stock market risk and
investment style risk. The Portfolio also has a low level of
derivatives risk.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 27
Bond Market Index Portfolio
Investment Objective
The Portfolio seeks to track the performance of a broad,
market-weighted bond index.
n 100%
Vanguard Total Bond Market Index Fund
Investment Strategy
The Portfolio invests 100% of its assets in Vanguard Total
Bond Market Index Fund, which employs an indexing
investment approach designed to track the performance of
the Barclays U.S. Aggregate Float Adjusted Index. This index
represents a wide spectrum of public, investment-grade,
taxable, fixed income securities in the United States—
including government, corporate, and international dollar-
denominated bonds, as well as mortgage-backed and
asset-backed securities—all with maturities of more than 1
year. The Fund invests by sampling the index, meaning that
it holds a broadly diversified collection of securities that, in
the aggregate, approximates the full index in terms of key
risk factors and other characteristics. All of the Fund’s assets
will be selected through the sampling process, and at least
80% of the Fund’s assets will be invested in bonds held in
the index. The Fund maintains a dollar-weighted average
maturity consistent with that of the index, which generally
ranges between 5 and 10 years.
Investment Risks
The Portfolio primarily is subject to moderate levels of
interest rate risk, income risk, call risk, prepayment risk, and
extension risk. The Portfolio also has low levels of credit risk,
index sampling risk, and derivatives risk.
Inflation-Protected Securities Portfolio
Investment Objective
The Portfolio seeks to provide inflation protection and
income consistent with investment in inflation-indexed
securities.
n 100%
Vanguard Inflation-Protected Securities Fund
Investment Strategy
The Portfolio invests 100% of its assets in Vanguard Inflation-
Protected Securities Fund. The Fund invests at least 80% of
its assets in inflation-indexed bonds issued by the U.S.
government, its agencies and instrumentalities, and
corporations. The Fund may invest in bonds of any maturity;
however, its dollar-weighted average maturity is expected
to be in the range of 7 to 20 years.
At a minimum, all bonds purchased by the Fund will be rated
investment-grade or, if unrated, will be considered by the
advisor to be investment-grade. Unlike a conventional bond,
whose issuer makes regular fixed interest payments and
repays the face value of the bond at maturity, an inflation-
indexed security (IIS) provides principal and interest
payments that are adjusted over time to reflect a rise
(inflation) or a drop (deflation) in the general price level for
goods and services. In the event of deflation, the U.S.
Treasury has guaranteed that it will repay at least the face
value of an IIS issued by the U.S. government.
Note: The Inflation-Protected Securities Portfolio seeks to
provide protection from inflation (i.e., a rise in the general
price level of goods and services), as measured by the
Consumer Price Index. It is possible that the costs of higher
education may increase at a rate that exceeds the rate of
increase of the Consumer Price Index.
Investment Risks
The Portfolio is subject to a high level of income fluctuation
risk. The Portfolio also has moderate to high levels of
interest rate risk and low levels of manager risk, and
derivatives risk.
28 Direct Plan Disclosure Booklet and Tuition Savings Agreement
Interest Accumulation Portfolio
Investment Objective
The Portfolio seeks income consistent with the preservation
of principal.
n 100%
Vanguard Short-Term Reserves Account
Investment Strategy
The Portfolio invests 100% of its assets in Vanguard Short-
Term Reserves Account, through which the Portfolio
indirectly owns funding agreements issued by one or more
insurance companies, synthetic investment contracts, as well
as shares of Vanguard Federal Money Market Fund.
Funding agreements are interest-bearing contracts that are
structured to preserve principal and accumulate interest
earnings over the life of the investment. These agreements
generally pay interest at a fixed rate and have fixed maturity
dates that normally range from 2 to 5 years. Investments in
new funding agreements are based on available liquidity in
the Portfolio and the competitiveness of the interest rates
offered by eligible high-quality issuers and depend on
market conditions and trends.
Under New York State law, the Trust may invest only in
those funding agreements issued by life insurance
companies whose general obligations are assigned the
highest or second-highest rating by two nationally
recognized rating services, or by one such rating service in
the event that only one such rating service assigns a rating
to such obligations, subject to a $350 million limit per issuer.
The minimum amount of a funding agreement is usually
about $15 million.
After a funding agreement is purchased, additional cash
contributions will be used to purchase shares of the Federal
Money Market Fund until there is enough cash to purchase
another funding agreement. There is a limited universe of
high-quality insurance companies and other issuers that
issue investments eligible for purchase by the Short-Term
Reserves Account. Within this constraint, Vanguard seeks to
diversify among eligible issuers and investments.
If necessary, the Short-Term Reserves Account may invest
all, or a large portion, of its assets in Vanguard Federal
Money Market Fund to limit its exposure to any single issuer
or to meet normal liquidity needs. The Federal Money Market
Fund invests in high-quality, short-term money market
instruments issued by the U.S. government and its agencies
and instrumentalities. Although these securities are high-
quality, most of the securities held by the Fund are neither
guaranteed by the U.S. Treasury nor supported by the full
faith and credit of the U.S. government. The Federal Money
Market Fund maintains a dollar-weighted average maturity
of 60 days or less and a dollar-weighted average life of 120
days or less. The Short-Term Reserves Account has a longer
average maturity than money market funds, which should
result in higher yields when interest rates are stable or
declining. However, because only a portion of the Short-
Term Reserves Account’s investment matures each year, its
yield will change more slowly than that of a money market
fund. As a result, when interest rates are rising, the
Portfolio’s yield may fall below money market funds’ yields
for an extended period.
Investment Risks
The Portfolio primarily is subject to income risk. In addition,
the Portfolio has low levels of exposure to credit risk,
manager risk, and derivatives risk.
The Income Portfolio and the Interest Accumulation
Portfolio both invest in Vanguard Short-Term Reserves
Account, which in turn invests in Vanguard Federal Money
Market Fund. Vanguard Short-Term Reserves Account’s
investment in the Federal Money Market Fund is not insured
or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency. Although the
Federal Money Market Fund seeks to preserve the value of
the investment at $1 per share, it is possible that Vanguard
Short-Term Reserves Account may lose money by investing
in the Fund. The contracts held by the Short-Term Reserves
Account are not guaranteed by the U.S. government,
Vanguard, the Program, the State of New York, or the
Program Administrator. Funding agreements are backed by
the financial strength of the insurance companies that issue
the contracts. The Portfolio may lose value if an insurance
company is unable to make interest or principal payments
when due.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 29
Explanation of the Risk Factors of
the Portfolios
Call Risk. This is the risk that during periods of falling
interest rates, issuers of callable bonds may call (redeem)
securities with higher coupons or interest rates before their
maturity dates. The Underlying Fund would then lose any
price appreciation above the bond’s call price and would be
forced to reinvest the unanticipated proceeds at lower
interest rates, resulting in a decline in the Underlying
Fund’s income.
Credit Risk. This is the risk that an issuer of a bond owned
by an Underlying Fund or a funding agreement issued to an
Underlying Fund will fail to pay interest and principal in a
timely manner, or that negative perceptions of the issuer’s
ability to make such payments will cause the price of that
bond or funding agreement to decline.
Country/Regional Risk. This is the risk that world events—
such as political upheaval, financial troubles, or natural
disasters—will adversely affect the value of securities issued
by companies in foreign countries or regions. In addition,
investments in foreign stocks can be riskier than U.S. stock
investments. The prices of foreign stocks and the prices of
U.S. stocks have, at times, moved in opposite directions.
Currency Risk. This is the risk that the value of a foreign
investment, measured in U.S. dollars, will decrease because
of unfavorable changes in currency exchange rates.
Currency Hedging Risk. This is the risk that the currency
hedging transactions entered into by an Underlying Fund
may not perfectly offset the Underlying Fund’s currency
exposures.
Derivatives Risk. Each of the Underlying Funds may invest,
to a limited extent, in derivatives. Generally speaking, a
derivative is a financial contract whose value is based on the
value of a financial asset (such as a stock, bond, or
currency), a physical asset (such as gold, oil, or wheat), a
market index (such as the Standard & Poor’s 500 Index), or
a reference rate (such as LIBOR). Investments in derivatives
may subject the Underlying Funds to risks different from,
and possibly greater than, those of the underlying securities,
assets, or market indexes. The Underlying Funds will not use
derivatives for speculation or for the purpose of leveraging
(magnifying) investment returns.
Emerging Markets Risk. This is the risk that the stocks of
companies located in emerging markets will be substantially
more volatile, and substantially less liquid, than the stocks of
companies located in more developed foreign markets
because, among other factors, emerging markets can have
greater custodial and operational risks; less developed legal,
regulatory, and accounting systems; and greater political,
social, and economic instability than developed markets.
Extension Risk. This is the risk that during periods of rising
interest rates, certain debt obligations will be paid off
substantially more slowly than originally anticipated, and the
value of those securities may fall. For Underlying Funds that
invest in mortgage-backed securities, extension risk is the
risk that during periods of rising interest rates, homeowners
will prepay their mortgages at slower rates.
Income Fluctuation Risk. This is the risk that an Underlying
Fund’s quarterly income distributions will fluctuate
considerably more than the income distributions of a typical
bond fund. For Vanguard Inflation-Protected Securities Fund
and Vanguard Short-Term Inflation-Protected Securities
Index Fund, income fluctuations associated with changes in
interest rates are expected to be low; however, income
fluctuations associated with changes in inflation are
expected to be high.
Income Risk. This is the risk that falling interest rates will
cause an Underlying Fund’s income to decline. Income risk is
generally high for short-term bond funds, moderate for
intermediate-term bond funds, and low for long-term bond
funds.
Index Sampling Risk. This is the risk that the securities
selected for an Underlying Fund using the sampling method
of indexing, in the aggregate, will not provide investment
performance matching that of the Underlying Fund’s target
index.
Interest Rate Risk. This is the risk that bond prices overall
will decline because of rising interest rates. Interest rate risk
should be high for long-term bond funds, moderate for
intermediate-term bond funds, and low for short-term bond
funds.
Investment Style Risk. This is the risk that returns from the
types of stocks in which an Underlying Fund invests will trail
returns from the overall stock market. Specific types of
stocks (for instance, small-, mid-, or large-capitalization
stocks) tend to go through cycles of doing better—or
worse—than the stock market in general. These periods
have, in the past, lasted for as long as several years.
Manager Risk. This is the risk that poor security selection or
focus on securities in a particular sector, category, or group
of companies will cause an Underlying Fund to
underperform relevant benchmarks or other funds with a
similar investment objective.
Nondiversification Risk. This is the risk that an Underlying
Fund’s performance may be hurt disproportionately by the
poor performance of bonds issued by just a few or even a
single issuer. Vanguard Total International Bond Index Fund
is considered nondiversified, which means that it may invest
a significant percentage of its assets in bonds issued by a
small number of issuers.
Prepayment Risk. This is the risk that during periods of
falling interest rates, homeowners will refinance their
mortgages before their maturity dates, resulting in
prepayment of mortgage-backed securities held by the
Underlying Fund. The Underlying Fund would then lose any
price appreciation above the mortgage’s principal and
would be forced to reinvest the unanticipated proceeds at
lower interest rates, resulting in a decline in the Underlying
Fund’s income.
Statutory Limit Risk. This is the risk that the Trust, in the
aggregate, would exceed the statutory limit for stocks set
forth by the New York State Retirement and Social Security
Law (Article 4-A), as modified by Article 6 of the New York
State Finance Law.
30 Direct Plan Disclosure Booklet and Tuition Savings Agreement
Stock Market Risk. This is the risk that stock prices overall
will decline. Stock markets tend to move in cycles, with
periods of rising prices and periods of falling prices. An
Underlying Fund’s target index may, at times, become
focused in stocks of a particular market sector, which would
subject the Underlying Fund to proportionately higher
exposure to the risks of that sector. Because the Underlying
Fund seeks to track its target index, the Underlying Fund
may underperform the overall stock market.
Pricing of Portfolio Units and Trade Date
Policies
Assets in your Account are invested in one or more
Portfolios, depending on the Investment Option(s) you
select. The price of a Portfolio Unit is calculated once each
business day after the close of trading on the New York
Stock Exchange (NYSE), which is normally 4 p.m., Eastern
time. The price is determined by dividing the dollar value of
the Portfolio’s net assets (i.e., total Portfolio assets minus
total Portfolio liabilities) by the number of Portfolio Units
outstanding. On holidays or other days when the NYSE is
closed, the Portfolio’s unit price is not calculated, and we do
not transact purchase or redemption requests.
When you purchase or redeem Units of a Portfolio, you will
do so at the price of the Portfolio’s Units on the trade date.
Your trade date will be determined as follows:
If we receive your transaction request to contribute
money, in good order, prior to the close of the NYSE, you
will receive that day’s trade date.
If we receive your transaction request in good order on a
business day after the close of the NYSE or at any time on
a non-business day, your transaction will receive the next
business day’s trade date.
Notwithstanding the preceding two bullet points, Recurring
Contributions will receive a trade date of the business day
before the day the bank debit occurs. See Section 4.
Opening and Funding Your AccountContribute to Your
Account—Recurring Contributions (also known as
Automatic Investment Plan (AIP)).
Direct Plan Disclosure Booklet and Tuition Savings Agreement 31
Section 6. A Note on Past Performance
In this section, we show the performance of the Portfolios in
the Direct Plan over various periods. The data used to create
the performance table on the following page includes each
Portfolio’s asset-based fee. See Section 2. Your Investment
Costs—Fees and Charges. The performance data shown
represent past performance, which is not a guarantee of
future results. Investment returns and principal value will
fluctuate, so investors’ Portfolio Units, when sold, may be
worth more or less than their original cost. For performance
data current to the most recent month-end, which may be
higher or lower than that cited, visit nysaves.org or call
877-NYSAVES (877-697-2837).
The performance of an index is not an exact representation
of any particular investment, as you cannot invest directly in
an index. Benchmarks comparative indexes represent
unmanaged or average returns on various financial assets,
which can be compared with Portfolios’ total returns for the
purpose of measuring relative performance. Benchmark
index returns reflect no deduction for fees or expenses,
which are applicable to Portfolio investments.
Keep in mind that the performance of the Portfolios will
differ from the performance of the Underlying Funds, even
when a Portfolio invests in only one Underlying Fund. This is
primarily because of differences in expense ratios and
differences in the trade dates of Portfolio purchases.
Because the Portfolios have higher expense ratios than the
Underlying Funds, over comparable periods of time, all other
things being equal, a Portfolio would have lower
performance than its comparable Underlying
Fund. (Of course, investing in the Underlying Funds does not
offer the same tax advantages as investing in the Portfolios.)
Performance differences also are caused by differences in
the trade dates of Portfolio purchases. When you invest in a
Portfolio, you will receive Portfolio Units as of the trade date
noted in Section 5. Your Investment Options—Pricing of
Portfolio Units and Trade Date Policies. The Portfolio will use
your money to purchase shares of an Underlying Fund.
However, the trade date for the Portfolio’s purchase of the
Underlying Fund’s shares typically will be one business day
after the trade date for your purchase of Portfolio Units.
Depending on the amount of cash flow into or out of the
Portfolio and whether the Underlying Fund is going up or
down in value, this timing difference will cause the Portfolio’s
performance either to trail or exceed the Underlying Fund’s
performance.
If you are invested in an Age-Based Option, the assets in the
Portfolio in which you are currently invested (Current
Portfolio) will automatically transfer to other Portfolios as
your Beneficiary ages and depending on the Age-Based
Option you chose. Accordingly, the assets in your Current
Portfolio may have been invested in the Current Portfolio for
all or only a portion of the period reported in the
performance table shown on the next page. Thus, your
personal performance may differ from the performance for a
Portfolio as shown in the table based on the timing and
amount of your investments.
32 Direct Plan Disclosure Booklet and Tuition Savings Agreement
Average Annual Total Returns
For the period ended July 31, 2016
Individual Portfolio/Benchmark 1-Year 3-Year 5-Year 10-Year
Since Portfolio
Inception Date
1
Inception Date
Aggressive Growth Portfolio 1.74% 9.51% 12.28% 7.44% 7.91% 11/14/2003
Benchmark: Aggressive Growth Composite Index
2
2.02 9.68 12.46 7.73 8.27
Bond Market Index Portfolio 5.88 4.07 3.42 4.75 4.23 11/20/2003
Benchmark: Spliced Barclays U.S. Aggregate Float
Adjusted Index
3
6.11 4.24 3.61 5.09 4.62
Conservative Growth Portfolio 5.32 5.63 5.78 5.23 5.19 11/14/2003
Benchmark: Conservative Growth Composite Index
4
5.61 5.86 6.03 5.47 5.50
Developed Markets Index Portfolio –5.76 2.40 3.32 9.74 3/26/2009
Benchmark: Spliced Developed Markets Index
5
–6.26 2.44 3.26 9.24
Growth Portfolio 3.18 8.37 10.26 7.68 7.57 11/14/2003
Benchmark: Growth Composite Index
6
3.39 8.54 10.43 7.98 7.94
Growth Stock Index Portfolio 2.95 12.22 13.22 9.15 8.21 11/20/2003
Benchmark: Spliced Growth Index
7
3.09 12.38 13.41 9.47 8.65
Income Portfolio 4.02 2.55 2.19 3.73 3.52 11/14/2003
Benchmark: Income Composite Index
8
4.07 2.64 2.28 4.02 3.88
Inflation-Protected Securities Portfolio 4.67 2.22 1.93 4.29 4.17 11/20/2003
Benchmark: Barclays U.S. Treasury Inflation
Protected Securities Index
5.04 2.36 2.02 4.67 4.58
Interest Accumulation Portfolio 0.66 0.36 0.35 1.29 1.56 11/14/2003
Benchmark: Institutional Money Market Fund Average
9
0.14 0.05 0.04 1.01 1.31
Mid-Cap Stock Index Portfolio 2.35 10.32 12.26 8.29 9.64 11/20/2003
Benchmark: Spliced Mid-Cap Index
10
2.45 10.47 12.41 8.58 10.14
Moderate Growth Portfolio 4.43 7.06 8.06 6.55 6.46 11/14/2003
Benchmark: Moderate Growth Composite Index
11
4.59 7.26 8.28 6.79 6.77
Small-Cap Stock Index Portfolio 2.22 8.30 11.73 8.42 9.41 11/19/2003
Benchmark: Spliced Small Cap Index
12
2.31 8.38 11.81 8.58 9.67
Value Stock Index Portfolio 6.48 9.62 12.82 6.15 7.86 11/20/2003
Benchmark: Spliced Value Index
13
6.67 9.78 13.01 6.42 8.33
1 Performance for the Portfolio and its benchmark is calculated since the Portfolio inception date. “Since Inception” returns for less than 1 year
are not annualized.
2 Weighted 70% Spliced Institutional Total Stock Market Index and 30% FTSE Global All Cap ex US Index. The Spliced Institutional Total Stock
Market Index consists of the Dow Jones Wilshire 5000 Index through April 8, 2005; the MSCI U.S. Broad Market Index through January 14, 2013;
and the CRSP US Total Market Index thereafter.
3 Consists of the Barclays U.S. Aggregate Bond Index through December 31, 2009, and the Barclays U.S. Aggregate Float Adjusted Index
thereafter.
4 Weighted 17.5% Spliced Institutional Total Stock Market Index, 7.5% FTSE Global All Cap ex US Index, 60% Spliced Barclays U.S. Aggregate
Float Adjusted Index, and 15% Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged).
5 Consists of the MSCI EAFE Index through May 28, 2013; the FTSE Developed ex North America Index through December 20, 2015; the FTSE
Developed All Cap ex US Transition Index through May 31, 2016; and the FTSE Developed All Cap ex US Index thereafter.
6 Weighted 52.5% Spliced Institutional Total Stock Market Index, 22.5% FTSE Global All Cap ex US Index, 20% Spliced Barclays U.S. Aggregate
Float Adjusted Index, and 5% Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged).
7 Consists of the MSCI U.S. Prime Market Growth Index through April 16, 2013; and the CRSP US Large Cap Growth Index thereafter.
8 Weighted 42% Spliced Barclays U.S. Aggregate Float Adjusted Index, 15% Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index
(USD Hedged), 18% Barclays U.S. 0–5 Year TIPS Index, and 25% Institutional Money Market Funds Average.
9 Derived from data provided by Lipper Inc.
10 Consists of the MSCI U.S. Mid Cap 450 Index through January 30, 2013; and the CRSP US Mid Cap Index thereafter.
11 Weighted 35% Spliced Institutional Total Stock Market Index, 15% FTSE Global All Cap ex US Index, 40% Spliced Barclays U.S. Aggregate Float
Adjusted Index and 10% Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged).
12 Consists of the MSCI U.S. Small Cap 1750 Index through January 30, 2013; and the CRSP US Small Cap Index thereafter.
13 Consists of the MSCI U.S. Prime Market Value Index through April 16, 2013; and the CRSP US Large Cap Value Index thereafter.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 33
Section 7. Federal and New York State Tax Considerations
This section summarizes some of the federal and New
York State tax consequences of investing in the Direct Plan.
However, this is not an exhaustive discussion and is not
intended as individual tax advice.
There is no way to ensure that the IRS or the New York
State DTF will accept the conclusions presented in this
section or if those conclusions would be upheld in court.
The federal and New York State tax rules that apply to your
Account are complex. Some rules are uncertain and their
application may vary depending on your particular facts
and circumstances.
We have based the following information on the relevant
provisions of the Code, New York State tax law, Proposed
Regulations, Notices, IRS rulings, opinions of DTF regarding
New York tax matters, and legislative history and
interpretations of applicable federal and New York State law
existing on the date of this Disclosure Booklet. However, it is
possible that Congress, the New York State Legislature, the
Treasury Department, the IRS, DTF, other taxing authorities,
or the courts may take actions that would adversely affect
the tax law consequences described. Those adverse effects
may be retroactive. In addition, if the Treasury Department
adopts final regulations, those regulations, when issued, may
alter the tax consequences discussed in this section or may
require us to make changes to the Direct Plan so that you
can take advantage of federal tax benefits. See Section 3.
Your Risks—Uncertainty of Tax Consequences.
Because it is your responsibility to verify contributions,
withdrawals, and transfers, it is important for you to keep all
records, invoices, and other documents regarding your
Account to support:
Expenses that you claim to be Qualified Higher-Education
Expenses;
Withdrawals because of the death or Disability of, or
receipt of a Qualified Scholarship by, your Beneficiary;
The earnings component of and compliance with the
timing requirements applicable to Qualified Rollovers;
The earnings component of contributions funded from
Qualified Savings Bonds or education savings accounts;
and
A Refunded Distribution.
We strongly encourage you and your Beneficiary to consult
a qualified tax advisor regarding the federal and state tax
consequences of:
Opening an Account.
Contributing money to, or withdrawing money from, your
Account.
Changing Beneficiaries of your Account.
Transferring money in your Account to another Account
or to an account in a 529 plan outside of the Program.
Transferring money in your Account to the Account of
another Account Owner.
Transfers from your Upromise account.
A qualified tax advisor can also help you consider:
The potential impact of income taxes imposed by
jurisdictions other than New York State, the City of New
York, and the City of Yonkers.
The applicability, if any, of state or local taxes in other
jurisdictions and the applicability of New York State and
local income, estate, and gift taxes if you and/or your
Beneficiary are not New York State residents.
In this section, we do not discuss the effects of the tax laws
of any country other than the United States or any state
other than New York.
If you are not a New York State taxpayer, consider before
investing whether your or your Beneficiary’s home state
offers a 529 plan that provides its taxpayers with favorable
state tax or other benefits that may only be available
through investing in your home state’s 529 plan.
Federal Tax Considerations
Contributions
Under federal law, contributions to your Account are not
considered taxable income to your Beneficiary.
Contributions to your Account are not deductible for federal
income tax purposes, but the income earned on your
contributions grows free from federal income tax until you
make a withdrawal from your Account. In the event you take
a Nonqualified Withdrawal, the income earned on your
contributions will be subject to federal income taxation and
the Federal Penalty.
Withdrawals
Withdrawals may comprise: (1) principal, which is not taxable
when distributed, and (2) earnings, if any, which may be
subject to federal income tax. We determine the earnings
portion based on IRS rules and report to the IRS and the
recipient. However, we do not report whether the
withdrawal is a Qualified Withdrawal or a Nonqualified
Withdrawal. The earnings portion of a withdrawal will
generally be calculated on an Account-by-Account basis.
If you don’t select a specific Investment Option(s), from
which to take a withdrawal, the withdrawal will be taken
proportionally from all the Investment Options in the
Account. If you request that a withdrawal be taken from
one or more specific Investment Option(s), the earnings,
for tax-reporting purposes, will be calculated based on the
earnings of all the Investment Options in your Account.
You are responsible for preparing and filing the appropriate
forms when completing your federal income tax return
and for paying any applicable tax directly to the IRS.
The earnings portion of withdrawals that are Qualified
Withdrawals or Qualified Rollovers is not subject to federal
income taxation. The earnings portion of other withdrawals,
including Nonqualified Withdrawals made because of the
death or Disability of a Beneficiary or the receipt by your
Beneficiary of a Qualified Scholarship, are includable in
34 Direct Plan Disclosure Booklet and Tuition Savings Agreement
computing the federal taxable income of the person
taking the withdrawals for the years in which the
withdrawals are made.
In addition, the earnings portion of Nonqualified Withdrawals
is subject to the Federal Penalty. However, the Federal
Penalty does not apply to Qualified Withdrawals or to
withdrawals:
Because of the death (when paid to your Beneficiary’s
estate) or Disability of your Beneficiary;
That are Qualified Rollovers (described below);
Because your Beneficiary received a scholarship (as long
as the withdrawal does not exceed the amount of the
scholarship); or
Because your Beneficiary attends a military academy (as
long as the withdrawal does not exceed the estimated
cost of attendance).
For additional information about Qualified Withdrawals and
federal taxes, see IRS Publication 970. You may also want to
consult a tax advisor.
Qualified Rollovers
You may transfer all or part of the money in your Account to
an account in a 529 plan outside of the Program without
adverse federal income tax consequences if the transfer
occurs within 60 days of the withdrawal from your Account
and the recipient account is established for the benefit of:
A person who is a Member of the Family of the original
Beneficiary (See Section 8. Maintaining Your Account—
Substituting Beneficiaries); or
The same Beneficiary, but only if the Rollover does not
occur within 12 months from the date of a previous
Rollover to any Qualified Tuition Program for the benefit
of that Beneficiary. See Section 4. Opening and Funding
Your AccountContribute to Your AccountIncoming
Rollover Contributions.
Transfers between the Direct Plan and the Advisor-Guided
Plan are not considered a Qualified Rollover; rather, these
types of transfers are considered Investment Exchanges.
You can only perform an Investment Exchange twice per
calendar year. See Section 8. Maintaining Your Account—
Changing Your Investment Options.
Other Contributions and Transfers
You can generally transfer money to your Account without
adverse federal income tax consequences if the money is:
A Refunded Distribution;
From another Account in the Program for a Member of
the Family of your Beneficiary of the receiving Account, if
transferred within 60 days of the withdrawal from the
distributing Account;
From an education savings account described by Section
530 of the Code; or
Proceeds from the redemption of a Qualified Savings
Bond described in Section 135 of the Code.
Other Higher-Education Expense Benefit Programs
If you have an education savings account under Section 530
of the Code or the American Opportunity Tax Credit and
Lifetime Learning Credits under Section 25A of the Code, as
discussed below, you must coordinate the tax benefits of
those accounts with your Direct Plan Account.
Education Savings Accounts
You may contribute money to, or withdraw money from,
your Account and an education savings account in the same
year. You cannot, however, count the same expenses as
“qualified education expenses” for education savings
account purposes and Qualified Higher-Education Expenses
for 529 plan purposes. If the total withdrawals from both
accounts exceed the amount of Qualified Higher-Education
Expenses of your Beneficiary, the recipient of the withdrawal
must allocate the higher-education expenses between both
withdrawals to determine how much may be treated as
tax-free under the education savings account and your
Account.
American Opportunity Tax Credit and Lifetime
Learning Tax Credits
Your participation in or the receipt of benefits from your
Account will not be affected by the use of the American
Opportunity Tax Credit or Lifetime Learning tax credit (if
you qualify for these credits) as long as any withdrawal from
your Account is not used for the same expenses for which
the tax credit was claimed.
Coordination with U.S. Savings Bond Provisions
If you redeem a Qualified Savings Bond and use those funds
to make contributions to your Account, you may be allowed
to exclude all or a portion of the income from that Qualified
Savings Bond in computing your federal taxable income for
the year in which you make the contribution. To qualify:
You must meet certain age, ownership, and income
limitations;
The Qualified Savings Bond must be issued after 1989; and
You, your spouse, or your eligible dependent must be your
Beneficiary of the Account.
Federal Gift Tax Exemption
As of 2016, you can contribute up to $14,000 a year
($28,000, if married and making the split-gift election) to
the Direct Plan without incurring federal gift taxes. This
amount is periodically adjusted for inflation.
Federal Gift and Estate Taxes
Contributions (including certain Rollover contributions) to
your Account generally are considered completed gifts to
your Beneficiary for federal gift, estate, and generation-
skipping transfer tax purposes and are potentially subject to
the federal gift tax. Generally, contributions to your Account
will not be subject to the federal gift tax or generation-
skipping tax if the contribution and all other gifts to your
Beneficiary (including all 529 plan accounts) together don’t
exceed the federal exclusion amount in 2016 of $14,000 a
year ($28,000 if you are married and split gifts with your
Direct Plan Disclosure Booklet and Tuition Savings Agreement 35
spouse). (The annual exclusion amount is periodically
adjusted for inflation.) Except in the situations described
below, if you were to die while assets remained in your
Account, the value of your Account would not be included
in your estate.
Where your contributions to your Account, any other 529
plan accounts, and any other gifts to your Beneficiary
exceed the applicable annual exclusion amount for a single
Beneficiary, the contributions may be subject to federal gift
tax and generation-skipping transfer tax in the year of the
contribution. If, however, your contributions to your Account
and any other 529 account for your Beneficiary exceed the
annual exclusion amount, you may elect to treat your
contributions as if they were made pro rata over five years,
thus allowing you to use the annual exclusions for the
current year and the following four years. To make this
election, you must file a gift tax return for the year in which
the gift was made and make the election on the return. For
2016, the maximum contribution to which the five-year
exclusion may apply is $70,000 (or $140,000 for a married
couple electing to split gifts). Once you make this election, if
you make any additional gifts to the same Beneficiary in the
same year or the next four years, the additional gifts may be
subject to gift tax or generation-skipping transfer tax in the
calendar year of each additional gift. If you choose to use
the five-year forward election but you die before the end of
the five-year period, the portion of the contribution allocable
to the years remaining in the five-year period (beginning
with the year after your death) would be included in your
estate for federal estate tax purposes.
The Code provides that amounts withdrawn upon the death
of a Beneficiary may be included in the gross estate of that
Beneficiary for federal estate tax purposes. However, under
the Proposed Regulations, all amounts in your Account at
the time of a Beneficiary’s death are included in that
Beneficiary’s gross estate, regardless of whether withdrawals
are made because of that Beneficiary’s death. The Advance
Notice, issued by the Treasury Department, would exclude
the Account from your Beneficiary’s estate under certain
circumstances.
If you change your Beneficiary or transfer money to an
Account for another Beneficiary, you may be subject to gift
tax if the new Beneficiary is:
Of a younger generation than your Beneficiary being
replaced; or
Not a Member of the Family of the current Beneficiary.
If the new Beneficiary is two or more generations below the
Beneficiary being replaced, the transfer may be subject to
the generation-skipping transfer tax.
Under the Proposed Regulations, these taxes are imposed
on your Beneficiary being replaced.
New York State Tax Consequences
The following New York State tax benefits are available only
to New York State taxpayers. If you are not a resident of
New York but are a New York State taxpayer, the deduction
used in computing New York State taxable income will not
be as beneficial to you as it is to New York State residents.
We make no representation as to the consequences to you
or your Beneficiary of contributions to, earnings on, transfers
of, or withdrawals from your Account under the laws of any
other state.
Your contributions (or those of your spouse) may be
deductible in computing your New York State taxable
income for New York State personal income tax purposes
up to $5,000 taken together for all contributions to all of
your Direct Plan and Advisor-Guided Plan Accounts in any
taxable year (and only to the extent not deductible or
eligible for credit for federal income tax purposes). However,
if a contribution check is from your spouse’s individual bank
account and not an account held jointly with you, we will
generally treat it as a contribution made by a third party and
it may not be deductible from New York State taxable
income by you or your spouse.
Please contact the DTF to see if the contribution qualifies for
a deduction. Spouses who file a joint New York State income
tax return may deduct up to $10,000 in contributions made
by either spouse even if only one spouse has New York
State adjusted gross income. See Section 4. Opening and
Funding Your AccountContribute to Your Account.
State Income Tax Benefits
New York State taxpayers: You can apply up to $5,000
($10,000 if married/filing jointly) toward calculating a
state tax deduction on contributions to the Direct Plan.
You must make a contribution before the end of a given
calendar year for it to be deductible for that calendar year.
We will treat your contribution sent by U.S. mail as having
been made the year sent if the U.S. Postal Service has
postmarked the envelope on or before December 31 of that
year. Regardless of the calendar year for which your
contribution is deductible, the trade date of the contribution
(and thus the price of the Portfolio Units purchased with the
contribution) will be determined based on the day we
receive the contribution and, with respect to a Recurring
Contribution and EBT contributions, on the business day
before the bank debit occurs.
If your Recurring Contribution designation date is January 1,
2, 3, or 4, that Recurring Contribution will be treated as
having been made in the new calendar year. See Section 5.
Your Investment Options—Pricing of Portfolio Units and
Trade Date Policies.
The income earned on your contributions may generally
grow free from state income tax until you make a
withdrawal from your Account provided you make a
Qualified Withdrawal.
Contributions to your Account by a third party are generally
not deductible from New York State taxable income by you
or the third party. Also, contributions are not includable in
36 Direct Plan Disclosure Booklet and Tuition Savings Agreement
computing the New York State taxable income of your
Beneficiary for New York State personal income tax
purposes. Please contact the DTF to see if the contribution
qualifies for a deduction.
The Program has received a letter from DTF advising that
all Rollover Distributions from an Account to an account in
a 529 plan outside of the Program that occur on or after
January 1, 2003, will be treated as Nonqualified Withdrawals
for New York State tax purposes. This tax treatment applies
without regard to whether the Rollover Distribution results
in income for federal tax purposes. This means that any
portion of the Rollover Distribution that is earnings or for
which a previous income deduction was taken will be
included in your New York State gross income for that
tax year.
If you withdraw funds and then later recontribute those
funds into an Account, including a Refunded Distribution,
the withdrawal will also be treated as a Nonqualified
Withdrawal without regard to whether the withdrawal and
recontribution result in income for federal tax purposes.
This means that the amount withdrawn will be included in
your New York State gross income and is subject to
recapture for amounts previously deducted from your
New York State personal income tax. However, you may
be eligible for a New York State tax deduction for the
recontribution to your Account.
Qualified Withdrawals and withdrawals because of the death
or Disability of your Beneficiary are not includable in
computing your or your Beneficiary’s New York State
taxable income. However, all Nonqualified Withdrawals and
withdrawals because of a Qualified Scholarship received by
your Beneficiary will be includable in computing your New
York State taxable income for the year in which you make
the withdrawal. This does not include any portion of that
withdrawal attributable to contributions to your Account
that were not previously deducted from your New York
State personal income taxes.
The DTF has also advised us that incoming rollover
contributions from an account in a 529 plan outside of the
Program to an Account that occur within 60 days of the
withdrawal, for the benefit of your Beneficiary or a Member
of the Family of your Beneficiary, may be deductible up to
$5,000 ($10,000 if filing jointly) in computing your New
York State taxable income. DTF further advised that
Upromise savings transferred to your Account may be
deductible in computing your New York State taxable
income.
New York repealed its gift tax on January 1, 2000.
The federal estate tax treatment of Account balances,
contributions, withdrawals from Accounts, and changes
in your Beneficiary of an Account governs the treatment
of these items for New York estate tax purposes. If you
are a New York City or City of Yonkers taxpayer, the
discussion of tax consequences described above also
applies when calculating taxable income for New York
City personal income tax and the City of Yonkers
resident income tax surcharge.
Prospective Account Owners should consider the potential
impact of income taxes imposed by jurisdictions other than
New York State, the City of New York, and the City of
Yonkers. Other state or local taxes may apply, including
gift and estate taxes imposed by other states, depending
on the residency or domicile of the Account Owner or your
Beneficiary. Account Owners and Beneficiaries should
consult a qualified tax advisor about the applicability, if
any, of state or local taxes in other jurisdictions and the
applicability of New York State and local income, estate,
and gift taxes on Account Owners and Beneficiaries who
are not New York State residents.
It is possible that a recipient of money withdrawn from the
Program may be subject to income tax on those withdrawals
by the state where he or she lives or pays taxes. It is also
possible that amounts rolled over into the Program from a
529 plan outside of the Program may be subject to a tax
imposed on the Rollover amount by that other state. You
should consult a qualified tax advisor regarding the state tax
consequences of participating in the Program.
You should also consult a qualified tax advisor with respect
to the New York State and local tax consequences of
transfers from your Upromise account.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 37
Section 8. Maintaining Your Account
Once you set up your Direct Plan Account, you may access
it 24 hours a day by logging on to nysaves.org. You’ll be
able to view your Account statements, transaction
confirmations, and other personal correspondence. You may
also make changes to your Account, including substituting
your Beneficiary and changing your Investment Options. If
you have additional questions or need assistance, you can
call 877-NYSAVES (877-697-2837).
Switching Beneficiaries
To avoid a taxable event, the new Beneficiary must be a
Member of the Family of the former Beneficiary.
Substituting Beneficiaries
You can change your Beneficiary at any time, except for
UGMA/UTMA 529 accounts. To avoid adverse tax
consequences, the new Beneficiary must be a Member of
the Family of the current Beneficiary. (For definition of
Member of Family, see Section 12. Glossary.)
Any change of your Beneficiary to a person who is not a
Member of the Family of your Beneficiary is treated as a
Nonqualified Withdrawal subject to applicable federal and
state income taxes as well as the Federal Penalty. There may
also be federal and state gift tax, estate tax, or generation-
skipping transfer tax consequences in connection with
changing your Beneficiary of your Account. You should
consult a qualified tax advisor. For more details, see Section
7. Federal and New York State Tax Considerations—Federal
Gift and Estate Taxes.
You can change your Beneficiary by going online at
nysaves.org or by mailing the appropriate form. If you’ve
already established an Account for the new Beneficiary,
you may process a Beneficiary change by phone at
877-NYSAVES (877-697-2837) or online. At the time you
change your Beneficiary, you may also reallocate assets in
the Account to a different mix of Investment Options.
You may not change your Beneficiary of an Account or
transfer funds between Accounts if the resulting total
balance of all Accounts for the new Beneficiary, including
the newly designated Account or newly transferred assets,
would exceed the Maximum Account Balance. See Section
4. Opening and Funding Your AccountMaximum Account
Balance.
Note: If you’re invested in an Age-Based Option and you
choose not to reallocate your assets, your new Beneficiary
will automatically be moved to a Portfolio within the
Age-Based Option that corresponds with his or her age. If
your new Beneficiary is in a different age range, the
Portfolio will change to reflect his or her age; however, the
overall risk level of the Portfolio will remain consistent with
the Investment Option you have selected—Conservative,
Moderate, or Aggressive.
Change of Account Ownership
You can transfer ownership of all of your Account balance
to a new Account Owner at any time. After the transfer is
complete, the new Account Owner will have sole control of
the assets you have chosen to transfer. Once you transfer all
the assets in your Account to a new Account Owner, your
Account will be closed.
To make the change, you need to submit the Direct Plan’s
Change of Ownership Form. If you are transferring
ownership for more than one Account, you’ll need to
submit a separate form for each Account. In addition, if
the new Account Owner doesn’t already have an account
for your Beneficiary, he or she must submit an Enrollment
Application. Forms can be downloaded online at
nysaves.org. For questions about the forms, you can also
call us at 877-NYSAVES (877-697-2837) on business days
from 8 a.m. to 9 p.m., Eastern time.
If the new Account Owner takes a withdrawal, he or she will
be liable for New York State income tax on any amount you
previously deducted in the case of Nonqualified
Withdrawals, withdrawals because of Qualified Scholarships,
and Rollovers to a 529 plan account outside of the Program.
The new Account Owner is liable for the tax even if he or
she isn’t a New York State taxpayer. Therefore, in order to
complete the transfer, you must certify that you have
disclosed to the new Account Owner any previous New
York State tax deductions taken for contributions made to
the Account. A transfer of control of your Account may also
have adverse income or gift tax consequences. You should
contact a qualified tax advisor regarding the application of
federal, state, and local tax law to your circumstances before
transferring ownership of an Account.
Making Changes to Your Account
You can change your Investment Options online, by
phone, or by mailing the appropriate form. You can make
these changes twice per calendar year even if you don’t
change your Beneficiary.
Changing Your Investment Options
Should your investment goals or needs change, you have
the flexibility to move the assets in your existing Account
to a different mix of Investment Options within the Direct
Plan. You can change your Investment Options twice per
calendar year. This reallocation of assets in your Account
is considered an Investment Exchange and is not subject
to federal and state taxes or to the Federal Penalty. You
can initiate this transaction online at nysaves.org, by
mailing the appropriate form, or by calling 877-NYSAVES
(877-697-2837). In addition, a transfer of assets between
the Direct Plan and the Advisor-Guided Plan is considered
an Investment Exchange.
38 Direct Plan Disclosure Booklet and Tuition Savings Agreement
For accounts invested in Age-Based Options, the automatic
reallocation of assets based on the age of your Beneficiary is
not considered one of your twice-per-calendar-year
Investment Exchanges.
In addition, changing the asset allocation of your existing
Account through an Investment Exchange will not
automatically change the allocation of future contributions
to that Account. You must change that allocation separately.
You can reallocate future contributions among Investment
Options at any time.
For example, if you want to change your Investment Option
from the Aggressive Growth Portfolio to the Moderate
Growth Portfolio, you can only do so twice per calendar
year. However, you could change the amount of future
allocations to the Moderate Growth Portfolio, or any other
Portfolio you hold, as often as you would like.
What if My Beneficiary Doesn’t Go to
College or Use the Account Assets?
If your Beneficiary doesn’t go to college or use
the Account assets for college, you may do one
of the following:
Keep the funds in the Account where they can
continue to be invested and grow tax-deferred.
The funds will be available in future years if your
Beneficiary decides to go to college or needs the
funds for graduate school or other higher education.
Transfer the balance, without being subject to federal
income taxes or the Federal Penalty, to an eligible
family member of your Beneficiary (including a parent,
a child, a sibling, a step- or half-sibling, a cousin, an
in-law in some cases, or yourself, if you are an eligible
family member).
Withdraw the money and use it for noneducational
purposes. (However, your earnings would be subject
to federal income tax and the Federal Penalty, as
well as state and local income taxes. New York State
taxpayers may also be subject to recapture for
state tax deductions for applicable contributions
to the Account.)
Unused Account Assets
If assets remain in your Account after your Beneficiary has
completed (or decided not to complete) higher education,
you may exercise one or more of the following options:
1. Keep all or a portion of the remaining assets in the
Account to pay possible future Qualified Higher-Education
Expenses, such as graduate or professional school
expenses, for the existing Beneficiary;
2. Change your Beneficiary to a Member of the Family of the
existing Beneficiary;
3. Withdraw all or a portion of the remaining assets.
The first two options should not result in federal and New
York State income tax liabilities. The third option is a
Nonqualified Withdrawal subject to applicable New York
State and federal income tax, including the Federal Penalty.
Under certain circumstances, if, for a period of at least three
years after your Beneficiary attains the age of 18 years, there
has been no activity in your Account and attempts to reach
you at the contact address provided are unsuccessful, your
Account may be considered abandoned. Abandoned
Accounts may be liquidated and reported to the New York
State Comptroller’s Office of Unclaimed Funds.
Confirmations and Statements
You will receive confirmations for any activity in your
Account, except for Recurring Contribution transactions,
payroll deduction transactions, the automatic movement of
Account assets to a more conservative Age-Based Option
as your Beneficiary ages, and transfers from a Upromise
account to your Account, all of which will be confirmed on a
quarterly basis.
You will receive quarterly Account statements showing for
that quarter:
1. Contributions made to your Account;
2. Withdrawals made from your Account;
3. Investment Exchanges;
4. Changes to contribution percentages among selected
Investment Options in your Account;
5. Automatic transfers of Account assets to more
conservative Age-Based Options; and
6. The total value of the Account at the end of that time
period.
We periodically match and update the addresses of record
for each Account against a change-of-address database
maintained by the U.S. Postal Service to reduce the
possibility that items sent by first-class mail, such as
Account statements, will be undeliverable.
You can securely access your Account information, including
quarterly statements and transaction confirmations, 24
hours a day at nysaves.org by obtaining an online user
name, password, and security image. If you enroll online, you
will be required to select a user name and password. If you
enroll using other means, you will be allowed (but not
required) to obtain a user name and password through
nysaves.org.
You are expected to regularly and promptly review all
transaction confirmations, Account statements, and any
email or paper correspondence sent by the Direct Plan.
Contact us immediately if you believe someone has
obtained unauthorized access to your Account or if you
believe there is a discrepancy between a transaction you
requested and your transaction confirmation.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 39
Safeguarding Your Account
To safeguard your Account, it is important that you keep
your Account information confidential, including your user
name and password. The Program has implemented
reasonable processes, procedures and internal controls to
confirm that transaction requests are genuine, but these
measures do not guarantee that fraudulent or unauthorized
instructions received by the Direct Plan will be detected.
Neither the Program nor any of its Associated Persons will
be responsible for losses resulting from fraudulent or
unauthorized instructions received by the Direct Plan,
provided we reasonably believed the instructions were
genuine. For more information about how we protect
your information and important information about how
you can protect your information, see the “Security” link
on nysaves.org.
Affirmative Duty to Promptly Notify Us of
Errors
If you receive a confirmation that you believe contains an
error or does not accurately reflect your authorized
instructions—e.g., the amount invested differs from the
amount contributed or the contribution was not invested in
the particular Investment Option(s) you selected—you must
promptly notify us of the error. If you do not notify us within
ten (10) business days of the mailing of the confirmation at
issue, you will be considered to have approved the
information in the confirmation and to have released the
Program and its Associated Persons from all responsibility
for matters covered by the confirmation. Moreover, any
liability due to such an error resulting from participation in
the Direct Plan for which the Program or any Associated
Persons are determined to be responsible shall be limited to
an amount equal to gains due to market movement that
would have resulted from the transaction during the 10-day
time period in which you should have acted.
40 Direct Plan Disclosure Booklet and Tuition Savings Agreement
Section 9. Withdrawing From Your Account
You may request a withdrawal from your Account at any
time online at nysaves.org, by mailing the appropriate form,
or by calling 877-NYSAVES (877-697-2837).
If your request is in good order, please allow seven to ten
business days for the withdrawal to reach you, your
Beneficiary, or the Eligible Educational Institution.
If you have made a withdrawal request for funds recently
contributed to your Account, we will not withdraw those
funds until they have been collected. It may take up to seven
business days for us to collect contributions by check,
Recurring Contribution, or electronic bank transfer (EBT).
We will pay the proceeds of a Nonqualified Withdrawal
(defined below) and of withdrawals because of a
Beneficiary’s death, Disability, or receipt of a Qualified
Scholarship to the Account Owner or your Beneficiary.
Estimated Time to Process Withdrawals
Request Delivery time
Qualified or Nonqualified
Withdrawal received in
good order
7 to 10 business days by
check or 2 business days
by EBT
Distribution to HESC for
transfer to an Eligible
Educational Institution
2 to 3 weeks
Withdrawals after a change
of address
9 business days plus the
delivery time noted
above
Withdrawals by EBT after a
change in bank information
15 calendar days
Paying Educational Institutions
If you would like to withdraw money from your Account
to pay for your Beneficiary’s Qualified Higher-Education
Expenses (other than for a foreign Eligible Educational
Institution), we will send the withdrawal directly to the
Eligible Educational Institution unless you request that HESC
transfer the withdrawal. In keeping with HESC’s mission to
help students pay for college, HESC can facilitate payments
from your Account to an Eligible Educational Institution.
If you request that HESC transfer the withdrawal, we will
transfer funds to HESC, and HESC, in turn, will transfer the
withdrawal to the applicable Eligible Educational Institution.
Please allow two to three weeks for this process.
Account with Multiple Investment Options
When making a withdrawal from an Account invested in
more than one Investment Option, you may select the
Investment Option or Options from which your funds are to
be withdrawn. If you do not designate a particular
Investment Option or Options, the withdrawal will be taken
proportionately from each of your existing Investment
Options. For example, if your Account balance at the time of
the withdrawal request was 72% in the Aggressive Growth
Portfolio and 28% in the Conservative Growth Portfolio, the
total withdrawal would be taken 72% and 28%, respectively,
from those two Investment Options. See Section 4. Opening
and Funding Your AccountContribute to Your Account
Allocation of Contributions.
Change of Address
We will hold withdrawal requests for nine business days
following a mailing address change if the withdrawal is made
by check to the Account Owner. We will also hold
withdrawal requests for nine business days following a
Beneficiary mailing address change if the withdrawal is
made by check payable to your Beneficiary.
In addition, you may not make withdrawals by EBT for
15 calendar days after bank information has been added
or edited.
Paying for School
Proceeds from your Account may be used to pay for
Qualified Higher-Education Expenses including tuition,
fees, and books.
Withdrawals: Qualified and Nonqualified
The IRS classifies withdrawals as either Qualified or
Nonqualified.
A Qualified Withdrawal is a withdrawal that is used to pay
for your Beneficiary’s Qualified Higher-Education Expenses.
The earnings portion of a Qualified Withdrawal is not subject
to New York State or federal income taxation.
A Nonqualified Withdrawal is any withdrawal other than:
1. A Qualified Withdrawal.
2. A withdrawal because of the death or Disability of your
Beneficiary.
3. A withdrawal because of the receipt of a Qualified
Scholarship by your Beneficiary (to the extent the amount
withdrawn does not exceed the amount of the
scholarship).
4. A Rollover to a 529 plan outside of the Program in
accordance with Section 529 of the Code.
5. A transfer of assets to the credit of another Beneficiary
within the Program, as long as the other Beneficiary is a
Member of the Family of the prior Beneficiary. See Section
8. Maintaining Your Account—Substituting Beneficiaries.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 41
Each of these exceptions is discussed in more detail in
Withdrawals Exempt From the Federal Penalty later in
this section.
The earnings portion of a Nonqualified Withdrawal is treated
as income to the recipient and thus subject to applicable
federal and state income taxes, including, in most cases, the
Federal Penalty.
The earnings portion of a Nonqualified Withdrawal will
be subject to New York State personal income tax. The
portion of the withdrawal for which you took a New York
State tax deduction also will be subject to New York State
personal income tax. Although we will report the earnings
portion of all withdrawals as required by applicable federal
and state tax laws, it is solely the responsibility of the
person receiving the withdrawal to calculate and report
any resulting tax liability.
Qualified Higher-Education Expenses
You may withdraw from your Account without incurring
additional taxes or penalties as long as the proceeds are
used for Qualified Higher-Education Expenses of your
Beneficiary including:
Tuition, fees, and the cost of books, supplies, and
equipment required for the enrollment or attendance of
your Beneficiary at an Eligible Educational Institution.
For taxable years beginning after December 31, 2014,
expenses for the purchase of computer or certain
peripheral equipment under the control of the computer
(e.g., printers); internet access and related services; and
certain computer software if the equipment, software, or
services are to be used primarily by your Beneficiary
during any of the years the Beneficiary is enrolled at an
Eligible Educational Institution.
In the case of a special needs Beneficiary, expenses
for special needs services incurred in connection
with enrollment or attendance at an Eligible
Educational Institution.
Certain costs of room and board incurred while attending
an Eligible Educational Institution at least half-time.
Room and board expenses may be treated as a Qualified
Higher-Education Expense only if your Beneficiary is
enrolled at least half-time. Half-time is generally defined as
half of a full-time academic workload based on the standard
used by the institution where your Beneficiary is enrolled;
the institution’s standard must be no less than that required
by the Department of Education’s federal student financial
aid standard. Room and board expenses submitted to the
Program must be consistent with the room and board
allowance calculated by the Eligible Educational Institution.
The allowance is the “cost of attendance” estimated by the
school for purposes of determining federal education
assistance eligibility for that year.
If your Beneficiary lives in housing owned or operated by the
school and the amount charged for room and board is
higher than the “cost of attendance” figure, then the actual
amount may be treated as Qualified Higher-Education
Expenses. A Beneficiary does not have to be enrolled at
least half-time to use a Qualified Withdrawal to pay for
expenses relating to tuition, fees, books, supplies,
equipment, eligible computer-related expenses, and
special needs services.
Eligible Educational Institutions
Eligible Educational Institutions include accredited
postsecondary educational institutions in the United States
and certain foreign institutions offering credit toward an
associate’s degree, a bachelor’s degree, a graduate level or
professional degree, or another recognized postsecondary
credential, and certain postsecondary vocational and
proprietary institutions. To be an Eligible Educational
Institution for purposes of Section 529 of the Code, an
institution must be eligible to participate in U.S. Department
of Education federal student financial aid and student loan
programs. Go to fafsa.ed.gov to see a list of all Eligible
Educational Institutions.
Refunds from Eligible Educational Institutions
If you receive a refund of any Qualified Higher-Education
Expenses from an Eligible Educational Institution that
were originally paid from money withdrawn from your
Account, you have some options on how you can use
the refunded amount:
1. Pay for Qualified Higher-Education Expenses incurred by
your Beneficiary in the same calendar year.
2. Recontribute the refunded amount to the Account or
another 529 plan account for the same Beneficiary for
whom the refund was made within 60 days of the date
of the refund. The recontributed amount cannot exceed
the amount of the refund. This is considered a Refunded
Distribution. Additional requirements may apply. Keep
in mind that while the earnings portion of a Refunded
Distribution would not be subject to federal income tax
or the Federal Penalty, it could be subject to recapture
of New York State tax deductions. See Section 7. Federal
New York State Tax Considerations—New York State
Tax Consequences.
3. If the refund is not considered a Refunded Distribution, roll
over the refunded money to a 529 account in another 529
plan for the same Beneficiary within 60 days of the date
the money was withdrawn from your Account. This option
is not allowed if a rollover was performed in the past 12
months for the same Beneficiary.
4. Roll over the money to an Account or a 529 account in
another 529 plan for another Beneficiary within 60 days of
the date the assets were withdrawn from your Account. If
you select this option, you will also need to provide a
signed letter of instruction letting us know that this is an
Indirect Rollover. To avoid adverse federal income tax
consequences, the new Beneficiary must be a Member of
the Family of the prior Beneficiary.
5. If the refund is not considered a Refunded Distribution,
treat the refund as a Nonqualified Withdrawal and either
keep the funds or return them to your Account as a new
contribution. Even if you return the money to your
Account, the earnings portion of Nonqualified Withdrawals
is subject to applicable federal, state, and local income
taxes, including the Federal Penalty on the earnings and
possible recapture of state deductions.
42 Direct Plan Disclosure Booklet and Tuition Savings Agreement
Note that only one Rollover can be completed per
Beneficiary every 12 months. For additional information
about Rollovers, see Section 4. Opening and Funding Your
AccountContribute to Your Account—Incoming Rollover
Contributions and Rollovers to Other 529 Plans on this
page. You may also want to discuss the tax implications
with a tax advisor.
Withdrawals Exempt from the Federal Penalty
In addition to the refunds discussed in paragraphs 1–5 under
Refunds From Eligible Institutions on the previous page, the
following withdrawals are exempt from the Federal Penalty.
Death of your Beneficiary
If your Beneficiary dies, you may select a new Beneficiary,
withdraw all or a portion of the Account balance, or
authorize all or a portion of the Account balance to be
withdrawn and paid to the estate of your Beneficiary.
Withdrawals that are paid to the estate of your Beneficiary
will not be subject to the Federal Penalty, but the earnings
portions will be subject to any applicable federal income tax
at the recipient’s tax rate.
If you select a new Beneficiary who is a Member of the
Family of the former Beneficiary, you will not owe any
additional federal or New York State income tax or the
Federal Penalty. See Section 8. Maintaining Your Account—
Substituting Beneficiaries.
Withdrawals because of the death of a Beneficiary are not
included in computing the New York State taxable income
of either the Account Owner or your Beneficiary.
Disability of your Beneficiary
If your Beneficiary becomes disabled, you can do the
following:
1. Select a new Beneficiary.
2. Withdraw all or a portion of the Account balance.
3. Authorize all or a portion of the Account balance to be
withdrawn and paid to your Beneficiary.
Disability is defined as the inability to engage in any
substantial gainful activity because of a medically
determinable physical or mental impairment that can
be expected to result in death or to be of long-continued
and indefinite duration.
Withdrawals because of Disability of your Beneficiary will
not be subject to the Federal Penalty, but the earnings
portions will be subject to any applicable federal income tax
at the recipient’s tax rate. However, these withdrawals will
not be subject to New York State income tax for either the
Account Owner or your Beneficiary.
If you select a new Beneficiary who is a Member of the
Family of the former Beneficiary, you will not owe any
additional federal or New York State income tax, or the
Federal Penalty. See Section 8. Maintaining Your Account—
Substituting Beneficiaries.
Receipt of a Qualified Scholarship/Attendance at a
Military Academy
If your Beneficiary receives a Qualified Scholarship, you may
choose one of the following actions:
1. Select a new Beneficiary.
2. Withdraw from the Account up to the amount of the
Qualified Scholarship or, in the case of attendance at a
military academy, up to the costs of advanced education
attributable to that attendance.
3. Authorize all or a portion of the Account balance to be
withdrawn and paid to your Beneficiary without imposition
of the Federal Penalty. However, the earnings portions will
be subject to any applicable federal income tax at the
recipient’s tax rate and recapture of New York State tax
deductions previously taken.
If you select a new Beneficiary who is a Member of the
Family of the former Beneficiary, you will not owe any
additional federal or New York State income tax. See
Section 8. Maintaining Your Account—Substituting
Beneficiaries.
A Qualified Scholarship is an educational allowance or
payment given to a student to pay for Qualified Higher-
Education Expenses.
You should consult a qualified educational or tax advisor
to determine whether a particular payment or benefit
constitutes a Qualified Scholarship. The entire amount
of a withdrawal on account of a Qualified Scholarship is
includable in computing the New York State taxable income
of the Account Owner (other than the portion of any such
withdrawal that was not previously deducted from New
York State personal income tax). These withdrawals to
your Beneficiary will not be subject to the Federal Penalty,
but the earnings portions will be subject to any applicable
federal and New York State income tax at the recipient’s
tax rate.
Rollovers to Other 529 Plans
You may roll over all or part of the balance of your Direct
Plan Account to a 529 plan outside of the Program within 60
days of withdrawal without incurring any federal income tax
or the Federal Penalty if:
1. The Rollover is to an account for the same Beneficiary if a
Rollover for the same Beneficiary did not occur with the
past 12 months.
2. The Rollover is for a new Beneficiary who is a Member of
the Family of the prior Beneficiary.
For New York State taxpayers, such Rollovers would be
subject to New York State income taxes on the earnings
portion, as well as the recapture of any previous New York
State tax deductions taken for contributions to the Account.
See Section 7. Federal and New York State Tax
Considerations—New York State Tax Consequences.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 43
Transfer Assets to Another Beneficiary Within the
Program
If you transfer assets within the Program from one
Beneficiary’s Account to another, as long as the new
Beneficiary is a member of the same Family of the old
Beneficiary, the transfer will be treated as a nontaxable
transfer of assets for federal and New York State income
tax purposes. Such a transfer will be permitted only to the
extent that the total balance of all Accounts for the benefit
of the new Beneficiary, including the transfer, would not
exceed the Maximum Account Balance. See Section 8.
Maintaining Your Account—Substituting Beneficiaries.
Refunded Distribution
A refund received from an Eligible Educational Institution
that qualifies as a Refunded Distribution will not be subject
to federal income tax or the Federal Penalty. However, a
Refunded Distribution could be subject to recapture of New
York State tax deductions. See Section 7. Federal and New
York State Tax Considerations—New York State Tax
Consequences.
Records Retention
Under current federal and state tax laws, you are responsible
for obtaining and retaining records, invoices, or other
documents and information that are adequate to
substantiate:
1. Particular expenses that you claim to be Qualified
Higher-Education Expenses; and
2. The death or Disability of a Beneficiary, or receipt of a
Qualified Scholarship by a Beneficiary.
The Program has no responsibility to provide, or to assist
you in obtaining, such documentation.
44 Direct Plan Disclosure Booklet and Tuition Savings Agreement
Section 10. Protections and Limitations
Creditor Protection Under U.S. and New York
State Law
Bankruptcy legislation protects certain assets in federal
bankruptcy proceedings that have been contributed to a
529 plan account. However, bankruptcy protection for 529
plan assets is limited and has certain conditions. To be
protected, your Beneficiary must be a child, stepchild,
grandchild, or stepgrandchild of the individual who files for
bankruptcy protection. In addition, contributions made to all
529 plan accounts for the same Beneficiary are protected
subject to the following limits:
Contributions made less than 365 days before the
bankruptcy filing are not protected.
Contributions made between 365 and 720 days before the
bankruptcy filing are protected up to $6,225 (as adjusted
for inflation).
Contributions made more than 720 days before the
bankruptcy filing are fully protected.
Under New York State law, an Account Owner’s assets are
exempt from money judgments as follows:
Fully exempt if the judgment debtor is the Account
Owner, who is also your Beneficiary of the Account, and
is a minor.
Fully exempt if the Account is established in connection
with a Qualified Scholarship.
Otherwise, contributions up to $10,000 are exempt if
the judgment debtor is the Account Owner.
This information is not meant to constitute individual tax
or bankruptcy advice. Please consult your own advisors
concerning your individual circumstances.
No Assignments or Pledges
Neither you nor your Beneficiary can use your Direct Plan
Account or a portion of the Account as collateral for a loan.
The Account cannot be assigned, transferred, or pledged as
security for a loan (including, but not limited to, a loan used
to make contributions to the Account) either by you or your
Beneficiary. However, you can transfer your Account
because of the following:
A change of Beneficiary.
A transfer within the Program to an Account with the
same Beneficiary or a new Beneficiary who is a Member of
the Family of the original Beneficiary.
A Rollover to a 529 plan outside of the Program for an
Account with the same Beneficiary or a new Beneficiary
who is a Member of the Family of the original Beneficiary.
A transfer of Account ownership to a new
Account Owner.
A transfer of Account ownership to a Successor
Account Owner.
Any pledge of an interest in an Account will be of no force
and effect.
Certain Rights of the Program Administrators
The Program Administrators reserve the right to:
Refuse, change, discontinue, or temporarily suspend
Account services, accept contributions and processing
withdrawal requests for any reason, including, but not
limited to, a closure of the NYSE for any reason other
than its usual weekend or holiday closings, any period
when trading is restricted by the SEC, or any emergency
circumstances.
Delay sending out the proceeds of a withdrawal request
for up to seven days.
Account Restrictions
In addition to rights expressly stated elsewhere in this
Disclosure Booklet, we reserve the right to:
Freeze an Account and/or suspend Account services
when the Program has received reasonable notice of a
dispute regarding the assets in an Account, including
notice of a dispute in Account ownership, or when the
Program reasonably believes a fraudulent transaction may
occur or has occurred.
Freeze an Account and/or suspend Account services
upon the notification to the Program of the death of an
Account Owner until the Program receives required
documentation in good order and reasonably believes that
it is lawful to transfer Account ownership to the Successor
Account Owner.
Freeze or redeem an Account, without the Account
Owner’s permission, in cases of threatening conduct or
suspicious, fraudulent, or illegal activity.
Reject a contribution for any reason, including
contributions for the Direct Plan that the Program
Manager or the Program Administrators believe are not in
the best interest of the Direct Plan, a Portfolio, or the
Account Owners.
The risk of market loss, tax implications, penalties, and any
other expenses as a result of such an Account freeze or
redemption will be solely the Account Owner’s responsibility.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 45
Section 11. Plan Governance and Administration
Who’s Who in the Program
The Trust All money in the Program is held in
the Trust Fund. The Comptroller
serves as trustee of the Trust Fund
and oversees all of its assets.
The Program The Direct Plan and New York’s 529
Advisor-Guided College Savings
Program (the Advisor-Guided Plan).
The Vanguard Group, Inc., serves as
Investment Manager for the Direct
Plan and J.P. Morgan Investment
Management Inc. serves as Investment
Manager for the Advisor-Guided Plan.
Ascensus Broker Dealer Services, Inc.,
serves as Program Manager for both
plans.
Program
Administrators
The Comptroller and HESC together
are responsible for administering and
establishing the rules that govern the
Program.
Program
Manager
Ascensus Broker Dealer Services, Inc.,
is responsible for day-to-day
operations of the Program, including
recordkeeping.
Investment
Manager
The Vanguard Group, Inc., is
responsible for managing the
investments in the Direct Plan.
Custodian The Bank of New York Mellon
Corporation is the custodian of
account assets for the Direct Plan.
The Trust
The New York State College Choice Tuition Savings Program
Trust Fund (Trust) is a statutory trust created by the New
York State Legislature specifically for the purpose of holding
and investing the Program’s assets. Trust assets are
segregated from, and not commingled with, other assets.
Although the Comptroller, as trustee of the Trust, is the legal
owner of all Trust investments, these investments are held
solely for the benefit of Account Owners. An investment in
the Program is an investment in municipal fund securities.
These securities are issued and offered by the Trust.
Although money contributed to an Account will be invested
in Portfolios that hold mutual funds (among other types of
investments), keep in mind that neither the Trust, the Direct
Plan, nor any of the Direct Plan’s Portfolios are mutual funds.
An investment in the Program is not an investment in shares
of any mutual fund.
The Program
The New York State College Choice Tuition Savings Program
includes a directly offered plan and an advisor-sold plan. The
directly offered plan is New York’s 529 College Savings
Program Direct Plan, for which The Vanguard Group, Inc.,
serves as the Investment Manager. The advisor-sold plan is
New York’s 529 Advisor-Guided College Savings Program
(the Advisor-Guided Plan), for which J.P. Morgan Investment
Management Inc. serves as the Investment Manager.
Ascensus Broker Dealer Services, Inc., serves as the Program
Manager for both plans.
The Program Administrators
The Comptroller and HESC together are the Program
Administrators and are responsible for implementing the
Program and establishing rules to govern the Program.
Generally, the Comptroller and HESC act jointly with respect
to the Program. The Comptroller oversees the investment of
all assets of the Program, which the Comptroller holds as
trustee of the Trust. If requested by an Account Owner,
HESC transmits payments to educational institutions and is
responsible for related matters. For more information about
the Comptroller and HESC, see The Comptroller and HESC
later in this section.
The Program Manager
Ascensus Broker Dealer Services, Inc., serves as the Program
Manager. Ascensus Broker Dealer Services, Inc., and its
affiliates (also referred to as Ascensus College Savings) are
responsible for the day-to-day operations of the Program.
Pursuant to the Management Agreement, Ascensus Broker
Dealer Services, Inc., has overall responsibility for the
management, administration, distribution, recordkeeping,
and transfer-agency services provided to the Program and is
permitted to delegate certain services, including the
provision of investment management and distribution
services for the Direct Plan to Vanguard. In certain
circumstances, Ascensus College Savings will also assist
Vanguard Marketing Corporation, an affiliate of The
Vanguard Group, Inc., with marketing and distribution of the
Direct Plan.
“Ascensus College Savings” is used to refer collectively or
individually, as the case requires, to Ascensus Broker Dealer
Services, Inc., Ascensus College Savings Recordkeeping
Services, LLC, Ascensus Investment Advisors, LLC, and their
affiliates.
The Program Manager’s term under the Management
Agreement extends to May 6, 2019, subject to earlier
termination in certain circumstances.
Direct Plan Investment Manager
The Vanguard Group, Inc., is the Direct Plan’s Investment
Manager. Vanguard is responsible for the following:
Investing the Direct Plan’s assets, subject to oversight by
the Comptroller.
Marketing and distributing the Program.
In certain circumstances, administering services pursuant
to the Management Agreement and to certain related
agreements between it and Ascensus Broker Dealer
Services, Inc.
46 Direct Plan Disclosure Booklet and Tuition Savings Agreement
The Investment Manager’s term under the Management
Agreement and related subcontracts extends to May 6,
2019, subject to earlier termination in certain circumstances.
“Vanguard” is used to refer collectively or individually, as the
case requires, to The Vanguard Group, Inc., Vanguard
Marketing Corporation, and their affiliates.
The Comptroller and HESC
The Comptroller and HESC are jointly responsible for
implementing and administering the Program. The
Comptroller is the administrative head of the Department of
Audit and Control, commonly known as the Office of the
State Comptroller. The Comptroller is New York State’s chief
fiscal officer and auditor and is responsible, as sole trustee of
the New York State and Local Retirement System and the
New York State and Local Police and Fire Retirement
System, for $178.1 billion in assets as of March 31, 2016. In
addition to administering the Direct Plan, the Office of the
State Comptroller performs the State of New York’s
pre- and postaudit functions, monitors and reports on other
public entities, and works to ensure that New York State and
its local governments are discharging their responsibilities in
an efficient, effective, and timely manner.
HESC is an agency of the State of New York created to
improve the postsecondary educational opportunities for
eligible students of New York State through financial aid and
loan programs. In addition to its administration of the Direct
Plan, HESC coordinates the State of New York’s
administrative efforts in student financial aid and loan
programs with those of the federal government.
Legal and Other Contractual Matters
Compliance With New York Retirement and Social
Security Law
The Trust is subject, on an aggregate basis, to the
investment limitations set forth in Article 4-A of the New
York State Retirement and Social Security Law (Article 4-A),
as modified by Article 6 of the New York State Finance
Law. Among other things, Article 4-A restricts the amount
that the Trust can invest in stocks, either directly or through
the Underlying Funds. However, it is possible that Account
Owners will allocate their assets among the various
Portfolios and among Investment Options available under
the Program in such a way that the Trust, in the aggregate,
would exceed the statutory limit for stocks.
If this occurs, the Program Administrators will direct that
certain Portfolios that invest all or partly in stocks reduce
their investment in stocks (and increase their investment
in bonds or other securities) to the extent necessary for
the Trust to comply in the aggregate with the limitation
imposed by Article 4-A on stock investments. If this were to
happen, appropriate notice (in Account statements and on
nysaves.org) would be made to affected Account Owners.
Securities Laws
The staff of the SEC has advised the Comptroller and HESC
that it will not recommend any enforcement action to the
SEC if, among other things, the Program distributes the
interests in the Trust and the Tuition Savings Agreements in
reliance upon the exemption from registration provided in
Section 3(a)(2) under the Securities Act of 1933, as
amended, in reliance on an opinion of counsel to the staff of
the SEC to that effect. In addition, the Comptroller and
HESC have received a “no action” letter from the New York
State Attorney General confirming that the Program may
conduct the offering of the Trust interests and the Tuition
Savings Agreements in New York without registration under
New York State securities laws. The Trust interests and the
Tuition Savings Agreements are not required to be
registered under the securities or “blue sky” laws of any
other state or other jurisdiction; therefore, under current law,
interests in the Trust and Tuition Savings Agreements may
be offered to individuals in all 50 states and the District of
Columbia.
Continuing Disclosure and Financial Audits
Certain financial information and operating data (the Annual
Information) relating to the Trust will be filed by or on behalf
of the Trust in electronic form with the Electronic Municipal
Market Access system (the EMMA System). The Municipal
Securities Rulemaking Board (MSRB), as the sole repository
for the central filing of electronic municipal securities
disclosure, maintains the EMMA System. The MSRB
functions in accordance with a Continuing Disclosure
Certificate relative to the Program pursuant to Rule 15c2-12
of the Securities Exchange Act of 1934. Notices of certain
enumerated events will be filed by or on behalf of the Trust
with the MSRB.
The Program Manager is responsible for preparing annual
financial statements for the Trust, which are audited by a
nationally recognized firm of independent certified public
accountants.
The financial statements for the Direct Plan for 2015 have
been audited by PricewaterhouseCoopers. The Annual
Information is hereby incorporated by reference herein.
Conflicts With Applicable Law
This Disclosure Booklet is for informational purposes only. In
the event of any conflicts between the description of the
Program contained here and any requirement of federal or
New York State law applicable to the matters addressed
here, that legal requirement will prevail over this Disclosure
Booklet. Applicable federal or New York State law will
govern all matters pertaining to the Program that are not
discussed in this Disclosure Booklet.
Information Subject to Change
Statements contained in this Disclosure Booklet that involve
estimates, forecasts, or matters of opinion, whether or not so
expressly described, are intended solely as such and are not
to be construed as representations of fact.
Not an Offer to Sell
This Disclosure Booklet does not constitute an offer to sell
or the solicitation of an offer to buy. There will not be any
sale of a security described in this Booklet by any person in
any jurisdiction in which it is unlawful to make an offer,
solicitation, or sale.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 47
Certain Contractual Matters
As Program Manager, Ascensus Broker Dealer Services,
Inc., is responsible for the performance of investment
management, administrative, recordkeeping, reporting,
regulatory, tax-reporting, marketing, and other services in
connection with the operation of the Direct Plan in
conformance with certain standards established in the
Management Agreement. As Investment Manager, Vanguard
is directly responsible for the distribution and investment
management of the Direct Plan in conformance with certain
standards established in the Management Agreement and
certain related agreements.
Ascensus Broker Dealer Services, Inc., has delegated certain
services that it is obligated to perform pursuant to the
Management Agreement, with respect to the Direct Plan,
with the consent of the Comptroller and HESC.
The Management Agreement and related agreements
provide that no delegation by Ascensus Broker Dealer
Services, Inc., and Vanguard will relieve them of any of their
respective responsibilities as Program Manager and
Investment Manager, as applicable. Ascensus Broker Dealer
Services, Inc., and Vanguard will be responsible for the
performance of the services by their respective delegates.
References to Ascensus College Savings or Vanguard in this
Disclosure Booklet include, as relevant, any entity to which
Ascensus Broker Dealer Services, Inc., or Vanguard
delegates its duties to perform services.
Termination of the participation of Ascensus Broker Dealer
Services, Inc., in the Direct Plan as Program Manager or
of the participation of Vanguard in the Direct Plan as
Investment Manager may not lead to termination of the
other’s participation in the Direct Plan.
Under the terms of the Management Agreement and certain
related agreements, Ascensus College Savings and
Vanguard are required to treat all Account Owner and
Beneficiary information confidentially. Ascensus College
Savings and Vanguard are prohibited from using or
disclosing this information, except as may be necessary to
perform their obligations under the terms of the agreements.
Custodian Arrangements
The Bank of New York Mellon Corporation is the custodian
of account assets for the Direct Plan.
48 Direct Plan Disclosure Booklet and Tuition Savings Agreement
Section 12. Glossary
The following terms are used throughout this Disclosure
Booklet.
Account: An account in the Direct Plan established by an
Account Owner for a Beneficiary.
Account Owner or You: An individual 18 years or older, an
emancipated minor (as determined by New York State law),
a trust, an estate, a partnership, an association, a company, a
corporation, or a qualified custodian under the Uniform Gifts
to Minors Act/Uniform Transfers to Minors Act (UGMA/
UTMA), who signs an Enrollment Application establishing an
Account. In certain cases, the Account Owner and
Beneficiary may be the same person.
Advisor-Guided Plan: New York’s 529 Advisor-Guided
College Savings Program. The Advisor-Guided Plan is sold
exclusively through financial advisors and offers investment
options that are not available under the Direct Plan. The fees
and expenses of the Advisor-Guided Plan are higher and
include financial advisor compensation. Please see
ny529advisor.com for more information.
Age-Based Option: An Investment Option in which the
asset allocation is based on your Beneficiary’s age and
becomes more conservative as your Beneficiary gets closer
to college age.
Ascensus College Savings: This term refers collectively or
individually, as the case requires, to Ascensus Broker Dealer
Services, Inc., Ascensus College Savings Recordkeeping
Services, LLC, Ascensus Investment Advisors, LLC, and
their affiliates.
Associated Persons: A collective way to refer to New York
State; the Comptroller; HESC; all agencies, instrumentalities,
and funds of New York State; the Trust; Ascensus College
Savings; Vanguard; and their respective affiliates, officials,
officers, directors, employees, and representatives of the
Direct Plan.
Beneficiary: The individual designated by an Account
Owner to receive the benefit of an Account.
Custodian: An individual who opens an Account on behalf of
a minor Beneficiary with assets from an UGMA/UTMA
account.
Disabled or Disability: Condition of a Beneficiary who is
unable to perform any substantial gainful activity because of
any medically determinable physical or mental impairment
that can be expected to result in death or to be of long-
continued and indefinite duration. Medical documentation
will be required to verify this condition. See IRS Publication
970, available at irs.gov/publications/p970/.
DTF: The New York State Department of Taxation and
Finance.
EBT or Electronic Bank Transfer: A service in which an
Account Owner authorizes the Direct Plan to transfer money
from a bank or other financial institution to an Account in
the Direct Plan.
Eligible Educational Institution: An institution as defined in
Section 529(e) of the Code. Generally, the term includes
accredited postsecondary educational institutions or
vocational schools in the United States and some accredited
postsecondary educational institutions or vocational schools
abroad that offer credit toward a bachelor’s degree, an
associate’s degree, a graduate-level or professional degree,
or another recognized postsecondary credential. The
institution must be eligible to participate in a student
financial aid program under Title IV of the Higher Education
Act of 1965 (20 U.S.C. §1088). You can generally determine
whether a school is an Eligible Educational Institution by
searching for its Federal School Code (identification number
for schools eligible for Title IV financial aid programs) at
fafsa.ed.gov.
Enrollment Application: A participation agreement between
an Account Owner and the Trust, establishing the
obligations of each and prepared in accordance with the
provisions of the Direct Plan.
Expense Ratio: The percentage of a Portfolio’s average net
assets used to pay its annual administrative and advisory
expenses. These expenses directly reduce returns to
investors. The expense ratio includes a Portfolio’s
proportionate share of operating, administrative, and
advisory expenses of the Underlying Funds.
Federal Penalty: A federal surtax required by the Code that
is equal to 10% of the earnings portion of a Nonqualified
Withdrawal.
Fees: The cost you incur when investing in the Direct Plan.
The fees are:
• Total Annual Asset-Based Fee: The total fee you pay for
investing in the Direct Plan. This fee consists of the
Underlying Fund Fee and the Program Management Fee.
The Total Annual Asset-Based Fee is deducted from the
returns of each Portfolio.
Underlying Fund Fee: This fee includes investment
advisory fees, as well as administrative and other
expenses, which are paid to Vanguard as applicable.
Program Management Fee: The Program Manager and
Investment Manager receive this fee for administration
and management of the Direct Plan. This fee is intended
to provide all income to the Program Manager necessary
to cover the expenses of administering and managing
the Direct Plan.
Financial Aid: Any grant or scholarship, loan, or paid
employment offered to help a student pay for college
expenses.
HESC: The New York State Higher Education Services
Corporation.
Incoming Rollover Contribution: Money transferred from a
529 plan outside of the Program to your Account in the
Program. Incoming Rollovers can be Direct Rollovers or
Indirect Rollovers.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 49
Indirect Rollover: The transfer of money from an account in
a 529 plan outside of the Program to the Account Owner,
who then contributes the money to an Account in the
Program. To avoid federal income tax consequences, money
received in an Indirect Rollover must be contributed to your
Account within 60 days of the withdrawal.
Individual Portfolio: Investment Options that are Multi-Fund
or Single-Fund Portfolios that do not change as your
Beneficiary ages.
Investment Exchange: A reallocation of assets in your
Account from one Investment Option to another. You can
change your Investment Options twice per calendar year.
Investment Manager: The Vanguard Group, Inc.
Investment Option: The Age-Based Options and Individual
Portfolios available for investment in the Direct Plan.
IRS: The Internal Revenue Service.
Management Agreement: An agreement among the
Comptroller, HESC, Ascensus Broker Dealer Services, Inc.,
Vanguard, and certain other entities to provide the Direct
Plan with administrative, Account servicing, marketing and
promotion, and investment management services. The
Management Agreement is now effective and will terminate
in 2019, or earlier as provided by its terms.
Maximum Account Balance: The maximum aggregate
balance of all Accounts for the same Beneficiary in Qualified
Tuition Programs sponsored by the State of New York, as
established by the Program Administrators from time to
time, which will limit the amount of contributions that may
be made to Accounts for any one Beneficiary, as required by
Section 529 of the Code. The current Maximum Account
Balance is $375,000.
Member of the Family: An individual as defined in Section
529(e)(2) of the Code. Generally, this definition includes a
Beneficiary’s immediate family members. A Member of the
Family means an individual who is related to your
Beneficiary as follows:
A son, daughter, stepson or stepdaughter, or a
descendant of any such person;
A brother, sister, stepbrother, or stepsister;
The father or mother, or an ancestor of either;
A stepfather or stepmother;
A son or daughter of a brother or sister;
A brother or sister of the father or mother;
A son-in-law, daughter-in-law, father-in-law, mother-in-
law, brother-in-law, or sister-in-law;
The spouse of your Beneficiary or the spouse of any
individual described above; or
A first cousin of your Beneficiary.
For purposes of determining who is a Member of the Family,
a legally adopted child or a foster child of an individual is
treated as the child of that individual by blood. The terms
“brother” and “sister” include half-brothers and half-sisters.
Minimum Contribution: The minimum amount you can
deposit into your Account. The minimum amount is $25 ($15
when investing through payroll deduction).
Nonqualified Withdrawals: A withdrawal from an Account
that is not one of the following:
A Qualified Withdrawal;
A withdrawal paid to a beneficiary of your Beneficiary (or
the estate of your Beneficiary) on or after the death of
your Beneficiary;
A withdrawal by reason of the Disability of your
Beneficiary;
A withdrawal by reason of the receipt of a Qualified
Scholarship or Tuition Assistance by your Beneficiary (to
the extent the amount withdrawn does not exceed the
amount of the scholarship);
A withdrawal by reason of your Beneficiary’s attendance
at certain specified military academies;
A withdrawal resulting from the use of Education Credits
as allowed under federal income tax law; or
A Rollover Distribution to another Qualified Tuition
Program that is not sponsored by the State of New York
in accordance with the Code, with appropriate
documentation.
NYSE: The New York Stock Exchange.
Plan: New York’s 529 College Savings Program Direct Plan.
Portfolio: An investment vehicle that invests in one or more
mutual funds or accounts managed by Vanguard. There are
two types of Portfolios: Multi-Fund Individual Portfolios and
Single-Fund Individual Portfolios.
Portfolio Unit or Unit: An interest in a Portfolio.
Program: The New York State College Choice Tuition
Savings Program. The Program includes the directly offered
plan that is described in this Disclosure Booklet (the Direct
Plan) and a separate plan that is offered through financial
advisors that is described in a separate Disclosure Booklet
(the Advisor-Guided Plan).
Program Administrators: The Comptroller and HESC.
Program Management Services: The services provided
to the Accounts, the Trust, and the Direct Plan by the
Program Manager and its affiliates, Ascensus College
Savings Recordkeeping Services, LLC, and Ascensus
Investment Advisors, LLC, pursuant to the terms of
the Management Agreement. These services include
recordkeeping and other administrative services.
Program Manager: Ascensus Broker Dealer Services, Inc.
Qualified Higher-Education Expenses: Qualified higher-
education expenses as defined in the Code and as may be
further limited by the Direct Plan. Generally, these include
the following:
Tuition, fees, and the costs of textbooks, supplies, and
equipment required for the enrollment or attendance of a
student at an Eligible Educational Institution;
For taxable years beginning after December 31, 2014,
expenses for the purchase of computer or certain
peripheral equipment under the control of the computer
(e.g., printers); internet access and related services; and
certain computer software if the equipment, software, or
50 Direct Plan Disclosure Booklet and Tuition Savings Agreement
services are to be used primarily by your Beneficiary
during any of the years the Beneficiary is enrolled at an
Eligible Educational Institution.
Certain costs of room and board of a student for any
academic period during which the student is enrolled at
least half-time at an Eligible Educational Institution;
Expenses for “special needs” students that are necessary
in connection with their enrollment or attendance at an
Eligible Educational Institution.
Qualified Rollovers: A transfer of funds from one 529 plan
account to another 529 plan account that meets the
requirements to avoid adverse federal tax consequences.
Qualified Scholarship: An educational allowance or
payment given to a student to pay for Qualified Higher-
Education Expenses.
Qualified Tuition Program: A program designed to allow
you to either prepay or contribute to an account established
for paying a student’s expenses at an Eligible Educational
Institution. Qualified Tuition Programs, also known as 529
plans, are sponsored by states, state agencies, or
educational institutions and are authorized by Section 529 of
the Code.
Qualified U.S. Savings Bond: A qualified U.S. Savings Bond
is a series EE bond issued after 1989 or a series I bond. The
bond must be issued either in your name (as the sole owner)
or in the names of both you and your spouse (as co-
owners). The owner must be at least 24 years old before the
bond’s issue date. The issue date is printed on the front of
the savings bond.
Qualified Withdrawal: A withdrawal from an Account that is
used to pay the Qualified Higher-Education Expenses of a
Beneficiary at an Eligible Educational Institution.
Recurring Contribution: A service in which an Account
Owner authorizes the Direct Plan to transfer money, on a
regular and predetermined basis, from a bank or other
financial institution to an Account in the Direct Plan.
Refunded Distribution: A withdrawal taken for Qualified
Higher-Education Expenses that is later refunded by the
Eligible Educational Institution and recontributed to a
Qualified Tuition Program that meets the following
requirements:
• The recontribution must not exceed the amount of the
refund from the Eligible Educational Institution;
• The recontribution must not exceed the amount of
withdrawals previously taken to pay the Qualified Higher-
Education Expenses of the Beneficiary;
• The recontribution must be made to an account in a
Qualified Tuition Program of the same Beneficiary to
whom the refund was made; and
• The funds must be recontributed to a Qualified Tuition
Program within 60 days of the date of the refund from the
Eligible Educational Institution.
A Refunded Distribution will not be subject to federal or
New York State income tax or the Federal Penalty.
Return: A percentage change, over a specified time period,
in Unit price.
Rollover Distribution: A withdrawal to a 529 plan account
outside of the Program for the benefit of the same
Beneficiary or for the benefit of a Member of the Family of
your Beneficiary. Only one Rollover Distribution is allowed in
a 12-month period for the same Beneficiary. A withdrawal to
a 529 plan outside of the Program may result in adverse tax
consequences.
Successor Account Owner: The person named in the
Enrollment Application, or otherwise to the Direct Plan, by
the Account Owner to take control of the Account if the
Account Owner dies. The Successor Account Owner may
be your Beneficiary if your Beneficiary has reached the Age
of Majority.
The Code: Internal Revenue Code of 1986, as amended.
The Comptroller: The Office of the State Comptroller of
New York State.
Treasury Department: United States Department of the
Treasury.
Trust: The New York State College Choice Tuition Savings
Program Trust Fund, as established by the New York State
Legislature. When you invest in the Direct Plan, you are
purchasing Portfolio Units issued by the Trust.
Trustee: The Comptroller of the State of New York is the
trustee of the Trust and is the legal owner of all Trust
investments.
Tuition Assistance Program: Financial aid and other types of
programs designed to help students pay their tuition and
fees at Eligible Educational Institutions.
Tuition Savings Agreement: The document that spells out
the terms under which you agree to participate in the Direct
Plan.
Ugift: A program through which you may invite family and
friends to contribute to your Direct Plan Account.
UGMA/UTMA: Uniform Gifts to Minors Act/Uniform
Transfers to Minors Act.
Underlying Funds or Funds: Underlying mutual funds or
other investments that make up the Portfolios.
Upromise: A rewards account where you earn a percentage
of what you spend on eligible everyday purchases.
Vanguard: The Vanguard Group, Inc., Vanguard Marketing
Corporation, and their affiliates.
We, Our, or Us: New York’s 529 College Savings Program
Direct Plan.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 51
Section 13. The Direct Plans Privacy Policy
New York State Personal Privacy Protection
Law Notice
Personal information is being requested from you by the
employees, agents, or representatives of the following
entities: the Comptroller; HESC; Ascensus Broker Dealer
Services, Inc., and The Vanguard Group, Inc.
Personal information you submit will be maintained in the
records of New York’s 529 College Savings Program Direct
Plan. Ascensus Broker Dealer Services, Inc., and Vanguard
are responsible for maintaining those records. They may be
contacted by mail at P.O. Box 55440, Boston, MA 02205-
8323 or by phone at 877-NYSAVES (877-697-2837).
Personal information is collected from you under the
authority of the New York State College Choice Tuition
Savings Program Act (Article 14-A of the New York
Education Law) and Section 529 of the Code. The personal
information you submit will be used to maintain records of
your contributions to the Program and the earnings on those
contributions. It will also be used to process transactions you
request. If you decline to submit the requested information,
it may be impossible for you to be enrolled in the Program
or for the Program to process transactions you request.
52 Direct Plan Disclosure Booklet and Tuition Savings Agreement
Section 14. New Yorks College Savings Program Direct Plan
Tuition Savings Agreement
I hereby agree with, and represent and warrant to, the
Comptroller of the State of New York, as Trustee of the
Trust, on behalf of myself and my Beneficiary, as follows.
Each capitalized term used but not defined in this Tuition
Savings Agreement (Agreement) has the meaning that term
has in the Disclosure Booklet:
A. 1. I have accepted, read, and understand the Disclosure
Booklet, this Agreement, and the Enrollment Application
as currently in effect. I have been given the opportunity to
obtain answers to all of my questions concerning the
Program, the Trust, the Account, and this Agreement. In
making a decision to open an Account and enter into this
Agreement, I have not relied upon any representations or
other information, whether oral or written, other than as
set forth in the Disclosure Booklet and this Agreement.
2. I certify that I am at least 18 years of age and a citizen
or a resident of the United States of America. My
Beneficiary of the Account also is a citizen or a
resident of the United States of America.
3. I am opening this Account solely to provide funds
for Qualified Higher-Education Expenses.
4. I understand that I am solely responsible for
determining which Qualified Tuition Program is best
suited to my needs and objectives. I understand that
the Investment Options within the Direct Plan may
not be suitable, and that the Direct Plan may not be
suitable, for all investors as a means of saving and
investing for higher-education costs. I have determined
that an investment in the Direct Plan is a suitable
investment for me as a means of saving for the
Qualified Expenses of my Beneficiary.
5. I recognize that investment in the Direct Plan involves
certain risks, including, but not limited to, those referred
to in Section 3 and Section 5 of the Disclosure Booklet,
and I understand these risks and have taken them into
consideration in making my investment decisions. I
understand and agree that there is no guarantee that
any investment objectives described in the Disclosure
Booklet will be realized and that none of the State of
New York; the Comptroller; HESC; any agency or
instrumentality of the federal government or the State
of New York; any fund established by the State of New
York or through operation of New York State law for
the benefit of holders of insurance contracts or policies
generally; Ascensus Broker Dealer Services, Inc., or any
of its affiliates; Vanguard or any of its affiliates; any
successor Program Manager or Investment Manager;
any agent, representative, or subcontractor retained in
connection with the Program (together, the Direct Plan
Officials); or any other person makes any guarantee of,
insures, or has any legal or moral obligation to insure
either the ultimate payout of all or any portion of the
amount contributed to my Account or any investment
return, or an investment return at any particular level,
on my Account.
6. I understand that contributions to a Portfolio will be
invested in one or more of the Underlying Funds. I will
not own shares of or interests in the Underlying Funds.
Instead, I will own interests in the Trust.
7. I cannot use my Account as collateral for any loan. I
understand that any attempt to use my Account as
collateral for a loan would be void. I also understand
that the Trust will not lend any assets to my Beneficiary
or to me.
8. I understand that the Program Manager has the right to
provide a Financial Advisor identified by me to the
Direct Plan with access to financial and other
information regarding my Account.
9. The Direct Plan Officials, individually and collectively,
are not: (i) liable for a failure of the Program to qualify
or to remain a Qualified Tuition Program under the
Code including any subsequent loss of favorable tax
treatment under state or federal law; (ii) liable for any
loss of funds contributed to my Account or for the
denial to me or my Beneficiary of a perceived tax or
other benefit under the Direct Plan, the Trust, or the
Enrollment Application; or (iii) liable for loss caused
directly or indirectly by government restrictions,
exchange or market rulings, suspension of trading,
war, acts of terrorism, strikes, or other conditions
beyond their control.
10. I understand and agree that there is no guarantee or
commitment whatsoever of or from the Direct Plan
Officials, or any other person that (i) the Beneficiary
of my Account will be admitted to any institution
(including any Eligible Educational Institution); (ii)
upon admission to an institution, my Beneficiary will
be permitted to continue to attend; (iii) my Beneficiary
will receive a degree from any institution; (iv) New
York State residency will be created for tax status,
financial aid eligibility, or any other purpose for my
Beneficiary because the individual is a Beneficiary of an
Account; or (v) contributions to my Account plus the
earnings thereon will be sufficient to pay the Qualified
Higher-Education Expenses of my Beneficiary. I
acknowledge that the Beneficiary of my Account has
no rights or legal interest with respect to the Account
(unless the Account is an UGMA/UTMA account or I
am both the Account Owner and my Beneficiary).
11. I understand and agree that neither I nor my Beneficiary
will be permitted to have any role in the selection or
retention of the Program Manager or Investment
Manager or to direct the investment of my Account
other than through my selection of Investment Options,
and that, once invested in a particular Investment
Option, contributions and earnings thereon may only
be transferred to another Investment Option twice
per calendar year, or otherwise when I select a new
Beneficiary of my Account.
12. I understand and agree that Ascensus Broker Dealer
Services, Inc., may not necessarily continue as Program
Manager, and Vanguard may not necessarily continue
as Investment Manager, for the entire period that my
Account is open, and even if they do, that there is no
assurance that the terms and conditions of the current
Management Agreement will continue without material
change, and that there are, accordingly, various
potential consequences I should take into consideration
as discussed in the Disclosure Booklet under Section 3.
Direct Plan Disclosure Booklet and Tuition Savings Agreement 53
Your Risks—Potential Changes to the Program,
Program Manager, and Investment Manager.
13. The following sentence is applicable for individuals
executing this Agreement in a representative or
fiduciary capacity: I have full power and authority
to enter into and perform this Agreement on behalf
of the individual named as Account Owner. If I am
establishing an Account as a custodian for a minor
under UGMA/UTMA, I understand and agree that I
assume responsibility for any adverse consequences
resulting from establishing this Account.
14. I understand and acknowledge that I have not been
advised by the Direct Plan Officials or any other person
to invest, or to refrain from investing, in a particular
Investment Option.
15. I acknowledge that I have an affirmative duty to
promptly review any and all trade confirmations and
Account statements for accuracy and completeness
and to promptly notify the Direct Plan of any items I
believe to be in error. If I do not notify the Direct Plan
within ten (10) business days of the mailing of the trade
confirmation or Account statement at issue, I will be
considered to have approved the information therein
and to have released the Program and its Associated
Persons from all responsibility for matters covered by
the confirmation or Account statement. Moreover, any
liability that is due to such an error resulting from
participation in the Direct Plan for which the Program
or any Associated Persons is determined to be
responsible shall be limited to an amount equal to gains
due to market movement that would have resulted
from the transaction during the 10-day time period in
which I should have acted.
B. Penalties and Fees. I understand and agree that if I make a
Nonqualified Withdrawal, I will be subject to the Federal
Penalty on the earnings portion of that withdrawal and
that the Federal Penalty will be payable in addition to, and
along with, my federal income tax for the year of the
Nonqualified Withdrawal. In addition, I understand and
agree that I may be subject to other fees, charges, or
penalties in the future, as described in the Disclosure
Booklet.
C. Necessity of Qualification. I understand that the Program
is intended to be a Qualified Tuition Program under
Section 529 of the Code and to achieve favorable New
York State tax treatment under New York State law. I
agree that the Comptroller and HESC may make changes
to the Program, this Agreement, and the Disclosure
Booklet at any time if the Comptroller and HESC
determine that such changes are necessary for the
continuation of the federal income tax treatment provided
by Section 529 of the Code or the favorable New York
State treatment provided by New York State law, or any
similar successor legislation. I acknowledge that I am not
relying on the Direct Plan Officials as my tax consultant or
financial planner.
D. Effectiveness of This Agreement. This Agreement shall
become effective upon the opening of my Account on
the records of the Program.
E. Contributions and Account Balance. I understand and
agree that I will not make contributions to my Account in
excess of the amount that I believe may be necessary to
pay the Qualified Higher-Education Expenses of my
Beneficiary and that I may not make a contribution to my
Account if the aggregate balance, including the proposed
contribution, of all Accounts for the same Beneficiary would
exceed the Maximum Account Balance limit to be
determined periodically by the Program Administrators in
conformance with federal requirements. I also understand
and agree that any portion of an attempted contribution to
my Account that, along with existing balances of all
Accounts for my Beneficiary, would exceed the then-current
Maximum Account Balance will be returned to me.
F. Applicability of Rules and Regulations of the Comptroller
and Finality of Decisions and Interpretations. I understand
and agree that my Account and this Agreement are
subject to those rules and regulations as the Comptroller
may promulgate in accordance with New York State
law. I also understand and agree that all decisions and
interpretations by the Direct Plan Officials in connection
with the operation of the Program shall be final and
binding on each Account Owner, Beneficiary, and
any other person affected by those decisions and
interpretations.
G. Indemnity. I understand that the establishment of
my Account will be based on my agreements,
representations, and warranties set forth in this
Agreement. I agree to indemnify and hold harmless
the Direct Plan Officials from and against any and all
loss, damage, liability, or expense, including reasonable
attorney’s fees, that any of them may incur by reason
of, or in connection with, any misstatement or
misrepresentation made by me in this Agreement or
otherwise with respect to my Account and any breach
by me of any of the agreements, representations, or
warranties contained in this Agreement. All of my
agreements, representations, and warranties shall
survive the termination of this Agreement.
H. Binding Nature; Third-Party Beneficiaries. This
Agreement shall survive my death and shall be binding
upon my personal representatives, heirs, successors,
and assigns. Each of the Direct Plan Officials is a third-
party Beneficiary of, and can rely upon and enforce,
any of my agreements, representations, and warranties
in this Agreement.
I. Amendment and Termination. The Comptroller may amend
this Agreement, or the Program may be suspended or
terminated, at any time. But unless it is permitted by law,
my Account will continue to benefit my Beneficiary or the
Beneficiary selected by my Successor Account Owner.
J. Governing Law. This Agreement is governed by New York
State law. I and the Comptroller, as Trustee of the Trust,
submit to exclusive jurisdiction of courts in New York
State for all legal proceedings arising out of or relating
to this Agreement.
K Survival. I understand and agree that my statements,
representations, warranties, and covenants will survive
the termination of my Account.
© 2016 State of New York.
NY529PD 092016
The Comptroller of the State of New York and the New York State Higher Education Services Corporation
are the Program Administrators and are responsible for implementing and administering the Direct Plan.
Ascensus Broker Dealer Services, Inc., serves as Program Manager and, in connection with its affiliates,
provides recordkeeping and administrative support services and is responsible for day-to-day operations
of the Direct Plan. The Vanguard Group, Inc., serves as the Investment Manager. Vanguard Marketing
Corporation markets, distributes, and underwrites the Direct Plan.
No guarantee: None of the State of New York, its agencies, the Federal Deposit Insurance Corporation (FDIC),
The Vanguard Group, Inc., Ascensus Broker Dealer Services, Inc., nor any of their applicable affiliates insures
accounts or guarantees the principal deposited therein or any investment returns on any account of
investment portfolio.
New York’s 529 College Savings Program Direct Plan
P.O. Box 55440
Boston, MA 02205-8323
Email: ny529@nysaves.org
Telephone: 1-877-NYSAVES (1-877-697-2837)
Website: nysaves.org