The Pennsylvania State Treasurer, Stacy Garrity, announced a significant milestone during College Savings Month, revealing that more than one million withdrawals have been made from PA 529 College and Career Savings Program accounts. This program, in existence for over three decades, has facilitated the use of over $5.6 billion to cover educational expenses.
Garrity acknowledged the profound impact of the PA 529 program on Pennsylvania families, emphasizing its dependability and flexibility throughout the years. The PA 529 program offers a means for families to systematically save for a broad range of eligible educational expenses, including apprenticeships, technical schools, colleges, universities, and even certain K-12 costs. It comprises two plans: the PA 529 Guaranteed Savings Plan (GSP) and the PA 529 Investment Plan (IP).
As of now, there are over 287,000 PA 529 accounts, an all-time high for the program. This number includes more than 110,000 PA 529 GSP accounts and over 176,000 PA 529 IP accounts, with nearly $6.8 billion collectively saved for future educational expenditures.
The PA 529 GSP enables families to save at current tuition rates to meet future tuition expenses, with account earnings linked to college tuition inflation rates. Families can select their preferred tuition credit rate, ranging from community colleges to Ivy League institutions.
On the other hand, the PA 529 IP provides diverse investment options, including target enrollment portfolios that adjust asset allocations as a child approaches postsecondary education. The PA 529 IP has received three consecutive Morningstar Silver ratings, signifying its status as a top-tier 529 plan nationally.
To enhance accessibility and affordability, Treasurer Garrity has implemented cost-saving measures for PA 529 account holders. These measures include multiple fee reductions for the PA 529 IP, as well as a two-year waiver of PA 529 GSP fees. In total, these changes have resulted in savings exceeding $11 million for account owners.
Both PA 529 plans offer notable state and federal tax benefits, including tax-free growth and no tax liability on qualified withdrawals. Furthermore, PA 529 accounts are exempt from state inheritance tax and do not impact eligibility for state financial aid.
The PA 529 College & Career Savings Program was established in 1992 through Act 11, sponsored by Senator Robert Jubelirer and signed into law by Governor Robert P. Casey, Sr. The legislation passed unanimously in both chambers of the General Assembly.
Another recent initiative, Keystone Scholars, automatically provides children born in 2019 and later with a $100 education savings fund. This fund grows through Treasury investments and is accessible for education expenses once the child reaches 18. Families are encouraged to link their own PA 529 accounts to their child’s Keystone Scholars account to monitor their combined savings. Keystone Scholars is funded without taxpayer dollars, and PA 529 accounts linked to Keystone Scholars have accumulated over $65 million for future educational expenses.
For additional information about PA 529 or Keystone Scholars, please visit pa529.com or contact 800-440-4000.