The Oregon College Savings Plan, the state’s flagship educational savings program, lost $100 million during the fall financial crisis, and the private company that owns the plan is currently under investigation.
OppenheimerFunds, Inc., a private mutual fund corporation, handles the OCSP, which is administered by state Treasurer Ben Westlund.
The plan is a type of 529 account, which can only be used for education funds. Since 2001, the plan has served thousands of investors, each of which can invest up to $310,000 in a tax-free account. This means University students likely have money invested in this account, since a traditional fourth-year senior today would have graduated from high school in 2005, well after the plan was established.
While losses during the fall were expected because of the hits to most Wall Street accounts, OppenheimerFunds is currently under investigation for taking too many risks with the fund.
Elizabeth Bickford, director of student financial aid at the University, said 529 plans are just one of several college-funding options for students.
“No one should put all their plans in one area,” Bickford said, and said students should use a variety of diverse funds to pay for an education.
Bickford advised students to become familiar with all their financial options.
University students who have money invested in a 529 plan or other mutual funds can find out whether they are FDIC insured, which the OCSP is not.
The OCSP Web site states, “These securities are neither FDIC insured nor guaranteed and may lose value. Before investing in the Plan, investors should carefully consider the investment objectives, risks, charges and expenses associated with municipal fund securities.”
If an account is FDIC-insured, investors can recover up to $100,000 if the institution fails or the money is lost.
Bickford said financial problems should not prevent students from pursuing a college education. Financial aid is always available, she said.
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College savings plan loses $100 million
Daily Emerald
January 8, 2009
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