Parents Utilizing a 529 College Savings Plan on Track to Meet 52 Percent of Expenses

BOSTON, December 5, 2007 - Fidelity Investments today announced the results of its first annual College Savings Indicator, which calculates how prepared parents are to pay for future college costs, currently projected to be more than $100,000¹ for today's high school seniors.

The Indicator found that parents nationwide are projected to meet only 24 percent of the total cost of their children's college education, including tuition, fees and room & board. Faring better are those parents utilizing a tax-advantaged 529 college savings plan, who are on track to cover 52 percent of their children's college education expenses.

As part of the new study, Fidelity conducted a nationwide survey of parents with college-bound children of all ages. Parents provided data on their current and projected household asset levels including college savings, use of an investment advisor and general expectations and attitudes towards financing their children's college expenses.

Using Fidelity's proprietary asset-liability modeling engine, the firm was able to calculate future college savings levels per household against anticipated college costs. The results provide insight into the financial challenges that lie ahead for many parents.

"Parents who do not have a solid college savings strategy or who are not utilizing a tax-advantaged savings account, such as a 529 plan, may see their child having to rely more heavily on student loans or other means to supplement costs," said Carolyn Clancy, executive vice president, Fidelity Personal and Workplace Investing. "For many graduates, this will not only increase their total college costs, but will likely also impede their ability to start saving early toward other financial goals, such as buying their first home or saving for retirement."

In fact, parents surveyed said they anticipate 18 percent of the total cost of college will be covered by student loans, a potentially sizeable burden. For example, using the $100,000 average college cost, and assuming an average 10-year repayment period with an interest rate of 7.5 percent, the total cost of the loan could exceed $25,000.

Parental Expectations for Covering College Expenses

When asked specifically how they expect to meet anticipated college costs, parents predict they will directly fund 27 percent through general savings and dedicated college savings accounts and an additional 16 percent from income they will earn while their child is in school.

Parents expect their children to self fund about one-quarter (26 percent) of the total cost of their college education through a combination of their own savings, income from working while in school and student loans. As a matter of fact, over three-quarters (79 percent) of the parents surveyed by Fidelity believe their children would appreciate college more if they too shared the responsibility of paying for it.

Scholarships and grants are expected to cover 20 percent of expenses, according to parents, while the remaining 11 percent of costs would come from other sources of funding like personal loans and gifts.

The Benefits of Starting Early and Saving Regularly

Starting to save early and regularly in a dedicated, tax-advantaged college savings plan account may significantly increase parents' ability to meet future college costs. According to the research, more than half (58 percent) of parents have already started saving to meet future college costs.

Yet, half of the parents did not start saving for college until their child was four years old, missing out on four years of potential additional savings and growth. As the following hypothetical scenario illustrates, which are derived from the Fidelity College Planner Tool, if parents of today's high school seniors started saving when their child was born, they would have had to save approximately $245 a month, a little more than $60 a week, to approximately cover the cost of college.² On the other hand, if they had not started saving until their child was five years old; they would have had to nearly double the monthly savings amount to $420, to achieve the same goal. If college savings were delayed until their child was 10 years old, they then would have been faced with a $915 monthly investment, a more significant increase.

IMPORTANT: The projections or other information generated by the Fidelity College Planner tool regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results.

Estimates of potential savings growth are based on 250 historical market simulations. The market return data used to generate the illustration is intended to provide you with a general idea of how an asset mix similar to that of age-based portfolios in a tax-deferred account, such as a 529 plan account have performed historically. Our analysis assumes a level of diversity within each asset class consistent with a market index benchmark that may differ from the diversity of your own portfolio. Other assumptions include the reinvestment of dividends and interest income, an annualized fee of .30% on the tax-deferred accounts, no management or service fees on custodial or taxable accounts, and no annual account maintenance fees on any accounts. If such expenses and fees had been included, the projected account balances would be lower. The tool assumes a federal income tax bracket of 25%. Unless otherwise known, the tool does not reflect the impact of state and local taxes; and therefore, the hypothetical returns of each account type may be lower. The tax treatment of each account may have a significant impact on the hypothetical results. Results generated by the tool are not intended to project or predict present or future value of actual investments or actual holdings, and they may vary with each use and over time. Periodic investment plans do not ensure a profit and do not protect against a loss in a declining market. Past performance is no guarantee of future results. Diversifying your portfolio does not ensure a profit or protect against a loss.

Advisors Making Positive Impact

The Fidelity College Savings Indicator found that those families working with financial advisors are on track to cover 47 percent of college costs suggesting the positive impact an advisor can have on college savings preparedness. Among those saving in a 529 plan, 40 percent opened their account through an advisor. Only 5 percent of families using an advisor believe they will not meet their college savings goal, further demonstrating the important role advisors play in helping parents feel confident about their ability to meet future college expenses.

"Advisors are not only helping parents to create a solid savings strategy for future college expenses, but they're also helping them to feel more confident that they can actually meet their goals, despite what may seem at first like a daunting sum of money to be saved," said Martha B. Willis, executive vice president, Fidelity Investments Institutional Services. "Regardless of whether families utilize an advisor or save on their own, it is critical that they practice good savings habits, such as starting early, investing regularly, and utilizing tax-advantaged accounts such as 529s that can help their savings stretch further."

Saving Early and Regularly Can Prevent the Need for Educational Trade-Offs Later

More than half (53 percent) of parents surveyed by Fidelity expressed concern that financial constraints will impact their children's educational choices. Parents with older children (ages 13-18) report they are re-evaluating their savings strategies to meet projected costs. Of this group, 32 percent are considering having their child live at home, one-quarter are weighing the costs of public versus private colleges, and 22 percent have cut back on spending in order to save more.

"This data reinforces the need for all parents to begin saving early and regularly for future college expenses," said Clancy. "After all, when the time comes to send your children off to college, it should be a joyous and positive experience for everyone and not a stressful time involving financial sacrifices and educational trade-offs."

About the Fidelity College Savings Indicator

Data for the Indicator (number of children in household, time to matriculation, school type, current savings and expected future contributions) are collected by Research Data Technology, an independent research firm, through a national online survey of almost 2,300 parents nationwide with children aged 18 and younger who are expected to attend college; with household incomes of $30,000 a year or more; and are the financial decision makers in their household. College costs are sourced from the College Board's Trends in College Pricing 2006 (with an annual inflation rate of 5 percent). Future assets per household are computed by Strategic Advisors, Inc. (a registered investment adviser and wholly owned subsidiary of FMR LLC). Within Fidelity's Asset-Liability model, Monte Carlo simulations are used to estimate future assets at a 75 percent confidence level.

About Fidelity Investments

Fidelity Investments is one of the world's largest providers of financial services, with custodied assets of more than $3.4 trillion, including managed assets of $1.6 trillion as of October 31, 2007. Fidelity offers investment management, retirement planning, brokerage, and human resources and benefits outsourcing services to 24 million individuals and institutions as well as through 5,500 financial intermediary firms. The firm is the largest mutual fund company in the United States, the No. 1 provider of workplace retirement savings plans, the largest mutual fund supermarket and a leading online brokerage firm. For more information about Fidelity Investments, visit www.fidelity.com.

About Fidelity Investments Institutional Services

Fidelity Investments Institutional Services Company provides investment management services through investment professionals at financial institutions nationwide, including wirehouses, regional and independent broker/dealers, banks, trust companies and insurance companies. The company offers Fidelity Advisor Funds^®, Variable Insurance Product (VIP) Portfolios, systematic investment plans, institutional money market funds and a comprehensive line of retirement products and services. Fidelity Investments Institutional Services Company's total assets under management were $308 billion as of October 31, 2007. For more information, advisors may visit https://advisor.fidelity.com.

As of October 31, 2007, Fidelity Investments manages more than $14 billion in assets and 900,000 accounts across seven state-sponsored 529 Plans, all open to residents of any state. The ScholarShare College Savings Plan, the ScholarShare Advisor College Savings Plan, the U.Fund^® College Investing Plan, the UNIQUE College Investing Plan, the Fidelity Advisor 529 Plan, the Delaware College Investment Plan and the Fidelity Arizona College Savings Plan are offered by the ScholarShare Investment Board, an agency of the state of California, the Massachusetts Educational Financing Authority (MEFA), the State of New Hampshire, the State of Delaware, and the Arizona Commission for Postsecondary Education, respectively, and managed by Fidelity Investments. If you or the designated beneficiary are not a California, Massachusetts, New Hampshire, Delaware, or Arizona resident, you may want to consider, before investing, whether your state or the designated beneficiary's home state offers its residents a Plan with alternate state tax advantages or other benefits.

Units of the portfolios are municipal securities and may be subject to market volatility and fluctuation.

¹Fidelity calculation based on the Trends in College Pricing: 2006, College Board's estimated total costs for an average 4-year college (private and public) beginning school year 2008-09.

²According to the Fidelity College Planner Tool.

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Fidelity Brokerage Services LLC, Member NYSE, SIPC,
100 Summer Street, Boston MA 02110

Fidelity Investments Institutional Services Company, Inc.
82 Devonshire Street, Boston, MA 02109

Please carefully consider each Plan's investment objectives, risks, charges and expenses before investing. For this and other information, call or write to Fidelity or visit fidelity.com for a free Fact Kit or request a free Offering Statement from your advisor or through advisor.fidelity.com. Read it carefully before you invest or send money.