New York's 529 College Savings Program Direct Plan

Investment Options

Program Features | Investment Options | Tax Benefits | Frequently Asked Questions

Important: Before you choose your investments, read the Program Brochure and Tuition Savings Agreement to learn about the objective, strategy, and risks of each option.

New York's 529 College Savings Program Direct Plan offers a comprehensive lineup of 15 investment options—three age-based options (conservative, moderate, and aggressive) and 12 individual portfolios. You may choose up to five investment options per account. All of the investment options are managed by Vanguard. (Although 529 Plans allow you to reallocate your account once per calendar year, you may change the direction of your future investments at any time.)

Learn more about choosing an investment strategy, or to assess your risk tolerance, use Vanguard's Asset Allocation Questionnaire. Although 529 Plans allow you to reallocate your account once per calendar year, you may change the direction of your future investments at any time.

Age-based options

Individual portfolios

Age-based options (three choices)

This may be the simplest way to save for college. When you select any of the age-based options, your assets will be managed according to the age of the beneficiary and your risk tolerance through a series of custom investment portfolios. In general, for younger beneficiaries, your assets will be invested initially in portfolios with higher concentrations of stocks. As the beneficiary ages, your assets are automatically shifted to portfolios with higher concentrations of bonds and short-term investments to help protect your capital and reduce market risk before you begin making withdrawals.

As the table below shows, for most age groups, the Conservative Age-Based Option has a higher concentration of assets in bonds or short-term investments than 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 in bonds and short-term investments tend to be less volatile than those with higher stock allocations. Less volatile portfolios generally will not decline as far when markets go down, but also will not appreciate in value as much when markets go up.

The following table outlines the age-based options:

Age of Beneficiary Conservative Option Moderate Option Aggressive Option

5 or younger Moderate Growth Portfolio Aggressive Growth Portfolio

6 through 10 Conservative Growth Portfolio Moderate Growth Portfolio

11 through 15 Income Portfolio

16 through 18 Conservative Growth Portfolio

19 or older Interest Accumulation Portfolio Income Portfolio

You can find additional information about each of the portfolios in the age-based options in the Individual portfolios section below.

Individual portfolios

Choose from among 12 individual portfolios if you wish to be more aggressive or more conservative than the age-based options allow. The individual portfolios offer investment choices of stock funds, bond funds, balanced funds, and an interest accumulation option. Each portfolio, in turn, invests your contributions in one or more investments managed by Vanguard.

Unlike the age-based options, the asset allocations of the individual portfolios remain fixed over time until you instruct the Program to change it.

The following table outlines the individual portfolios:

Investment Options Investment Objectives Underlying Investments

Stock Portfolios

Aggressive Growth Portfolio Seeks to track the performance of a benchmark index that measures the investment return of the overall stock market. Vanguard^® Total Stock Market 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%).

Balanced Portfolios

Conservative Growth Portfolio Seeks current income and low to moderate growth of capital. Vanguard^® Total Bond Market Index Fund (65%) and Vanguard^® Total Stock Market Index Fund (35%).

Growth Portfolio Seeks growth of capital and low to moderate current income. Vanguard^® Total Stock Market Index Fund (65%) and Vanguard^® Total Bond Market Index Fund (35%).

Moderate Growth Portfolio Seeks growth of capital and current income. Vanguard^® Total Stock Market Index Fund (50%) and Vanguard^® Total Bond Market Index Fund (50%).

Bond Portfolios

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 current income. Vanguard^® Total Bond Market Index Fund (50%), Vanguard^® Inflation-Protected Securities Fund (25%), and 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%).

Short-Term Investments Portfolio

Interest Accumulation Portfolio Seeks income consistent with the preservation of principal. Vanguard^® Short-Term Reserves Account (100%).

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The Income Portfolio and Interest Accumulation Portfolio invest in the Vanguard Short-Term Reserves Account which, in turn, invests in Vanguard Prime Money Market Fund. The Vanguard Short-Term Reserves Account's investment in the Vanguard Prime Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of the investment at $1 per share, it is possible that the Vanguard Short-Term Reserves Account may lose money by investing in the Fund.

New York's 529 College Savings Program Direct Plan is described in the current applicable Program Brochure and Tuition Savings Agreement. Accounts are opened by completing an Enrollment Form.

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. Upromise Investments, Inc. serves as the Program Manager and has overall responsibility for the day-to-day operations, including effecting transactions and, in certain circumstances, assisting Vanguard Marketing Corporation, an affiliate of The Vanguard Group, Inc., with marketing and distribution of the Plan. The Vanguard Group, Inc. serves as Investment Manager for the Direct Plan and, in certain circumstances, assists Upromise Investments, Inc. with other administrative services. Vanguard Marketing Corporation markets and distributes the Direct Plan.

No guarantee: None of the State of New York, its agencies, the Federal Deposit Insurance Corporation (FDIC), The Vanguard Group, nor Upromise insures accounts or guarantees the principal deposited therein or any investment returns on any account or investment portfolio. The value of your account will vary based on market conditions and the performance of the investment options you select, and may be more or less than the amount you deposit.

Tax benefits are subject to certain limitations and certain withdrawals are subject to federal, state and local taxes. Please Note: Before investing in any 529 plan, you should consider whether your or the beneficiary's home state offers a 529 plan that provides its taxpayers with favorable state tax and other benefits that are only available through investment in the home state's 529 plan. You also should consult your financial, tax, or other adviser to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. You also may wish to contact directly 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.

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 offers investment options that are not available under the Direct Plan. However, the fees and expenses of the Advisor Plan are higher and include financial advisor compensation. Be sure to understand the options available before making an investment decision.

New York's 529 College Savings Program Direct Plan is described in the current applicable Program Brochure and Tuition Savings Agreement. Call 1-877-697-2837 or click here for the Program Brochure and Tuition Savings Agreement, which includes investment objectives, risks, charges, expenses and other information; read and consider them carefully before investing. Vanguard Marketing Corporation, Distributor and Underwriter.

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