We were taken aback by a Feb. 9 commentary in the Bangor Daily News suggesting that the NextGen college investing plan, administered by the Finance Authority of Maine, has been administered inappropriately, and created a “secret” fund that was not benefiting Maine citizens.

As officers of FAME we represent a 15-member board of directors consisting of the treasurer of the state of Maine, the commissioners of Economic and Community Development and Conservation, and 12 members appointed by our current and former governor that include, college presidents, bank presidents and business and education leaders from across the state.

Members of the FAME board are subject to confirmation by the legislature including public hearing on their nomination and vote by the Maine Senate. We are proud of our FAME affiliation and extremely proud of the success of the state’s 529 college investing program, NextGen.

Started in 1999 with a $160,000 investment by FAME, the NextGen college investing plan has grown to be the sixth largest in the country with over $3.5 billion in assets of which well over 95 percent are directly the result of our partnership with Merrill Lynch.

This past year NextGen generated net revenue of $3.2 million and had a cash balance of nearly $5 million in reserves for benefits to Maine Citizens. Currently, $3.4 million of NextGen funds are available for Maine citizens to have better access to higher education, and encourage college savings with the goal of reducing student debt.

The profits of NextGen are distributed to the citizens of Maine through various programs developed with the input from several advisory committees that include representatives from the state private, public, and community colleges, investment

professionals, and legislators. We’re proud that all NextGen programs

are based strictly on the needs of the people they serve:

. NextGen Access Grant: A $1 million need based grant program targeted to Maine’s growing population of nontraditional students seeking higher education.

. NextGen Supplemental Grant: A $2 million need based grant program designed to meet the needs of those students that don’t have access to other grants due to increased enrollments and federal cutbacks in aid.

. NextGen Matching Program: A savings incentive program that encourages lower income people to save for college by providing initial grants of up to $200 along with

ongoing matching funds of up to $200 a year.

. First Step College Grant: Up to $700,000 will be available to fund $50 investments for Maine newborns to begin college savings accounts with the goal of getting families to think early about college and its funding

for their children and, over time, to reduce student debt.

. Fee Rebates: $114,000 was given back to Maine account holders of NextGen in 2005 to reduce the fees associated with their accounts.

. Investments in Maine: NextGen was the first college investing plan in the country to direct that investments flow back to the State. Currently, NextGen has over $12 million deposited in Maine Banks allowing for further investment in Maine communities.

The board of directors of FAME has encouraged FAME’s management to be conservative with the deployment funds to these programs to assure that they will be sustainable. The program is still relatively new, and revenues from NextGen are subject to stock market fluctuations, customer redemptions for the intended use of college tuitions, and variations in the usage of our benefit programs. As cash flows become more predictable, NextGen benefits to Maine should only increase. This is no “secret” fund of cash, but rather responsible fiscal management of the program to assure that the promise of our programs is kept for years to come.

The Finance Authority of Maine regularly reports to the Maine Legislature on all of its programs, including the NextGen program. FAME is a quasi-state agency with fiscal oversight provided not only by its board, FAME’s external auditors, but also by its regular appearance at the Appropriations and Financial Affairs Committee during the state budget process and its reports to both the Joint Standing Committee on Business, Research and Economic Development and the Joint Standing Committee on Education and Cultural Affairs.

Maine people, legislators and our governor can be proud of the success of the NextGen program and what it has done and is poised to do for Maine people. To suggest otherwise suggests a lack of a full understanding of the value of the program and the resources it brings to Maine. If only Maine could have more programs like NextGen;

programs that provide a return on investment to the citizens of Maine.

This commentary was written by Shep Lee, Joyce Maker and Jim Conlon, the chairman, vice chairman and treasurer, respectively, of the Finance Authority of Maine board of directors.