1. *

2. The High Cost of an Education Rising Cost Of College Education Source: U.S. Department of Education, 2002. Projected cost upon child's entrance to college for four years at a public or private college. Figures are based upon the 5.10% and 5.18% 10-year average annual increase in public and private college costs respectively as reported by the U.S. Department of Education for the 2001-2002 school year of $9,953 for a four-year public college and $29,120 for a four-year private college. Public UniversitiesPrivate Universities $125,849 $42,965 $110,635 $328,589 Projected Costs for a Four-Year College Education 20022021

3. AGENDA Higher Education Leads to Opportunities Ways to Save for College Bringing You One Step Closer— Franklin Templeton 529 College Savings Plan

4. Education Provides a Lifelong Value Source: U.S. Census Bureau, Current Population Survey (CPS), March 2002 Higher Education Leads to Opportunities $2,742 Average Monthly Earnings $3,415 $4,974 Education Level High School Diploma Associate Degree Bachelor’s Degree Master’s Degree $6,178

5. Higher Education Leads to Opportunities Don’t Delay the Inevitable What do you think Mary and Michael will have to contribute on a monthly basis to accumulate the same amount as John? John – $200/month for 15 years Mary – Michael – ??? $517/month for 8 years $1,708/month for 3 years This is a hypothetical illustration to represent the effects of compounding assets monthly assuming an annual rate of return of 8%. It does not reflect an actual investment in Franklin Templeton 529 College Savings Plan or any taxes payable upon withdrawal. A periodic investment in the plan does not assure a profit or protect against a loss in declining markets. Returns are not guaranteed and may be less than or greater than the amounts illustrated.

6. Higher Education Leads to Opportunities This is a hypothetical illustration to represent the effects of compounding assets monthly assuming an annual rate of return of 8%. It does not reflect an actual investment in Franklin Templeton 529 College Savings Plan or any taxes payable upon withdrawal. A periodic investment in the plan does not assure a profit or protect against a loss in declining markets. Returns are not guaranteed and may be less than or greater than the amounts illustrated. The Cost of Procrastination ContributionsEarnings $0$20,000$60,000$80,000$40,000 John Mary Michael

7. Higher Education Leads to Opportunities The savings example assumes monthly investments over a period of 15 years at an annual return of 8%. The borrowing example assumes an interest rate of 4.06% over a period of 15 years. These examples, however, are not representative of any particular investment. Source: SallieMae.com. Based on Stafford loan issued by Sallie Mae during July 2002–June 2003. Assumes borrower at some point consolidates all federal education loans into a SMART LOAN account which locks in a lower interest rate, and depending on the loan balance, can extend repayments up to 30 years. There is no guarantee of your investment or of any specific rate of return, and you may have a gain or a loss on the amounts invested. Saving Now vs. Borrowing Later SaveBorrowSaveBorrow $891 $160,423 $62,421 $347

8. Ways to Save for College What is a 529 Plan? A state-sponsored tuition program designed to provide tax incentives to encourage families to save for the high cost of a college education.

9. Ways to Save for College Qualified Expenses Within 529s Tuition Room and board Fees Books Required supplies and equipment What Are Other Types of College Savings Vehicles? UGMA/UTMA Coverdell Education Savings Account

10. Ways to Save for College 529 Plans vs. Other College Savings Vehicles * Formerly Education IRA ** Source: Savingforcollege.com Tax Deferral 529 Plans Yes UGMA/UTMA No Coverdell Education Savings Account* Yes Maximum Contribution On average up to $244,000 or more per beneficiary** None$2,000 per child under the age of 18 per year Income Limits None Phase out for single filers at $95,000 to $110,000 for joint filers, $190,000 to $220,000

11. Ways to Save for College 529 Plans vs. Other College Savings Vehicles * Formerly Education IRA Who Controls Assets? Account Owner Custodian, until child reaches 18 or 21 (varies by state) Account Owner Beneficiary Changes Permitted. Can be changed to another family member without penalty. Not permittedPermitted. Can be changed to another family member without penalty. Estate Planning Features Assets are generally transferred out of the donor’s estate, yet the donor retains control. Assets are transferred out of the estate and donor loses control. 529 PlansUGMA/UTMA Coverdell Education Savings Account*

12. Franklin Templeton 529 College Savings Plan* Benefits and Advantages Tax Advantages Earnings grow tax deferred Qualified withdrawals are federally tax free through 2010 Contributions receive favorable gifting and estate tax treatment *Offered and administered by the New Jersey Higher Education Student Assistance Authority (HESAA); managed and distributed by Franklin Templeton Distributors, Inc. an affiliate of Franklin Resources, Inc., which operates as Franklin Templeton Investments.

13. Franklin Templeton 529 College Savings Plan Benefits and Advantages Professional Investment Management Distinctive:Combination of specialized investment management groups with a long-standing history. Diversified:Full range of specialized investment disciplines. Consistent:Seeks superior risk-adjusted returns over the long term. Reliable:Dependable account servicing.

14. Franklin Templeton 529 College Savings Plan Benefits and Advantages No income restrictions Full control over assets Low contribution requirements High contribution limits Wide range of colleges and technical programs

15. Franklin Templeton 529 College Savings Plan Corefolio™ Risk-Adjusted Portfolios Franklin Templeton Distributors, Inc. ("FTDI") has retained Franklin Advisers, Inc., a registered investment advisor, to serve as the initial investment manager for the Franklin Templeton investment options. Both FTDI and Franklin Advisers, Inc. are affiliates of Franklin Resources, Inc. A 529 plan is not a mutual fund. Investors in the Plan do not hold shares of the underlying Franklin Templeton funds but rather, shares in a portfolio of the plan. Mutual Shares Fund Franklin Capital Growth Fund Templeton Growth Fund Franklin Growth Fund 25%

16. Franklin Templeton 529 College Savings Plan Investors in Franklin Templeton 529 College Savings Plan do not hold shares of the underlying Franklin Templeton funds, but rather shares in a portfolio of the plan. This material is not a recommendation of any particular security, is not based on any particular financial situation or needs, and is not intended to replace the advice of a qualified attorney, tax advisor, investment professional or insurance agent. Before making any financial commitment regarding a Section 529 college savings plan, consult with the appropriate financial advisor. Growth Portfolio Risk-Adjusted Portfolios Growth & Income PortfolioIncome Portfolio International EquityDomestic EquityIncomeCash 35% 40% 10% 15% 80% 20% 30% 70%

17. Franklin Templeton 529 College Savings Plan Investors in Franklin Templeton 529 College Savings Plan do not hold shares of the underlying Franklin Templeton funds, but rather shares in a portfolio of the plan, which is not an investment in a mutual fund. For more information, including charges, expenses and risks of investing, please see the Investor Handbook. Age-Based Portfolio International Equity Domestic Equity Income Cash Newborn-8Age 9-12Age 13-16 Age 21+Years Age 17-21 30% 70% 22.5% 52.5% 5% 20% 35% 40% 10% 15% 80% 20% 60% 15% 17.5% 7.5%

18. Franklin Templeton 529 College Savings Plan Investors in Franklin Templeton 529 College Savings Plan do not hold shares of the underlying Franklin Templeton funds, but rather shares in a portfolio of the plan, which is not an investment in a mutual fund. For more information, including charges, expenses and risks of investing, please see the Investor Handbook. Individual Portfolios Domestic Equity Franklin Capital Growth 529 Portfolio Franklin Growth 529 Portfolio Franklin Small Cap Value 529 Portfolio Franklin Small-Mid Cap Growth 529 Portfolio Mutual Shares 529 Portfolio International Equity Mutual Discovery 529 Portfolio Templeton Foreign 529 Portfolio Templeton Growth 529 Portfolio

19. Franklin Templeton 529 College Savings Plan All plan options are managed by affiliates of the publicly traded Franklin Resources, Inc., operating as Franklin Templeton Investments, with the exception of the S&P 500 Index 529 Portfolio, which is managed by UBS Global Asset Management (US) Inc. Investors in Franklin Templeton 529 College Savings Plan do not hold shares of the underlying Franklin Templeton funds, but rather shares in a portfolio of the plan, which is not an investment in a mutual fund. For more information, including charges, expenses and risks of investing, please see the Investor Handbook. Individual Portfolios Income Franklin Income 529 Portfolio Franklin Templeton Stable Value 529 Portfolio Franklin U.S. Government Securities 529 Portfolio Index S&P 500 Index 529 Portfolio

20. Let’s Review Higher Education Leads to Opportunities Investing in a college education is an expense you can afford. Ways to Save for College 529 Plans offer a wider range of benefits than traditional college savings vehicles. Bringing You One Step Closer Franklin Templeton 529 College Savings Plan makes it easy for you to get started and begin saving for college.

21. Take Action Today It’s as easy as 1-2-3…  Educate yourself  Benefit from the expertise of an investment professional  Start investing today in a Franklin Templeton 529 College Savings Plan