Encourages Pennsylvanians to start saving during College Savings Month
Harrisburg, PA — September is College Savings Month and Treasurer Stacy Garrity celebrated today by announcing that more than one million withdrawals have been made from PA 529 College and Career Savings Program accounts. Since the program was created more than 30 years ago, account holders have used more than $5.6 billion to help pay for education expenses.
“The fact that families have made more than a million withdrawals from PA 529 accounts is a dramatic demonstration of the impact this incredible program is having for Pennsylvania families,” Garrity said. “PA 529 has been helping Pennsylvania families save for education since it was enacted as the Tuition Account Program in 1992. The career landscape continues to change, but the dependability and flexibility of PA 529 remains the same – helping families save and pay for education expenses no matter what type of training or education their child seeks.”
PA 529 accounts are designed to help Pennsylvania families steadily and strategically save for a wide variety of qualifying educational expenses, including apprenticeships, technical schools, colleges and universities, and even some K-12 expenses. There are two PA 529 plans to choose from, the PA 529 Guaranteed Savings Plan (GSP) and the PA 529 Investment Plan (IP).
There are currently more than 287,000 PA 529 accounts, more than at any time in the program’s history, including more than 110,000 PA 529 GSP accounts and more than 176,000 PA 529 IP accounts. Families have nearly $6.8 billion saved for future education expenses.
The PA 529 GSP allows families to save at today’s tuition rates to meet tomorrow’s tuition costs. Account earnings are based on college tuition inflation rates. Families can choose the tuition credit rate they wish to save at from community colleges to Ivy League universities.
The PA 529 IP offers a variety of investment options, including target enrollment portfolios that automatically reallocate assets as a child approaches postsecondary education enrollment. The PA 529 IP has received three consecutive Morningstar Silver ratings – establishing it as a best-in-class 529 plan nationwide.
“Since becoming Treasurer, I’ve taken big steps to make sure the PA 529 program is as affordable and accessible for any Pennsylvanian who wants to save for education,” Garrity said. “We’ve reduced fees for the PA 529 IP several times – including twice this year! And we’ve waived PA 529 GSP fees for two consecutive years. In total, these changes are saving account owners more than $11 million.”
Both PA 529 plans have significant state and federal tax advantages, including tax-free growth and no taxes owed on qualified withdrawals. PA 529 accounts are not subject to state inheritance tax and do not affect eligibility for state financial aid.
The PA 529 College & Career Savings Program was created by Act 11 of 1992, when Senate Bill 2, sponsored by Senator Robert Jubelirer, was signed into law by Governor Robert P. Casey, Sr. The bill passed both chambers of the General Assembly unanimously.
“Senator Jubelirer, his colleagues in the General Assembly and former Governor Casey all deserve a great deal of credit for their foresight,” Garrity said. “Their bipartisan work to help families save for education continues to pay off more than three decades later.”
Keystone Scholars, a more recent legislative initiative, provides children born in 2019 and after, with an automatic $100 to start education savings. The $100 will grow through investments made by Treasury and be ready to use for education expenses when the child turns 18. Families are encouraged to open their own PA 529 account and link it to their child’s Keystone Scholars account to see their total savings. Keystone Scholars uses no taxpayer dollars. Pennsylvanians with PA 529 accounts linked to their child’s Keystone Scholars accounts have already saved more than $65 million for future education expenses.
To learn more about saving with PA 529 or Keystone Scholars, visit pa529.com or call 800-440-4000.
STACY GARRITY, STATE TREASURER
Information provided to TVL by: