Treasurer Stacy Garrity reminded families who have PA 529 Guaranteed Savings Plan (GSP) accounts that contributing by August 31 can boost their savings by taking advantage of the fact that many college tuition credit rates are scheduled to increase on September 1.
“This month is a great time to make additional contributions to your PA 529 GSP account,” Garrity said. “And for anyone thinking about opening a new PA 529 GSP account, August is also the perfect time to do that. Saving now, before this fall’s tuition rate increases go into effect, is a fantastic way for parents and families to optimize their education savings.”
The PA 529 GSP program allows families to save for a future education at today’s cost. In other words, if you save enough for a semester today, you’ll have enough for a semester at that school in the future – no matter when or how much tuition has gone up in the meantime. That makes an investment by August 31, before the new GSP credit rates go into effect, especially valuable.
PA 529 GSP account owners can choose from a variety of college tuition levels to save at, from a PA community college average to an average of Ivy League universities.
Because the effect of tuition inflation is generally applied to PA 529 GSP accounts on September 1, contributions made by August 31 often receive an increase in value the very next day – and the earnings can be used as soon as the summer semester of the next calendar year. If used the following fall semester, two years of tuition inflation benefits would be available.
Before new PA 529 GSP credit rates take effect for the 2022-23 school year, families may compare PA 529 GSP credit rates at popular levels.
To help families save even more, Treasury is waiving asset-based fees for PA 529 GSP account owners during the current fiscal year (July 1, 2022, to June 30, 2023). In addition, PA 529 GSP account owners with account contributions of $100 or more as of June 30, 2022, received a deposit of $100. These fee waivers and deposits are funded by PA 529 GSP surplus earnings, using no tax dollars.
“I’m always looking for ways to make PA 529 work even better for Pennsylvania families,” Garrity said. “By waiving fees and providing the additional $100 deposit, I want to let Pennsylvanians know that we view Treasury as a partner in their efforts to save for their children’s future.”
The PA 529 College and Career Savings Program is designed to help Pennsylvania families steadily and strategically save for future educational expenses. Treasury offers two plans: the PA 529 GSP, and the Morningstar Silver Rated PA 529 Investment Plan, which offers a variety of investment options.
PA 529 plans have significant state and federal tax advantages and can be used for a wide variety of qualifying technical, collegiate, apprenticeship and K-12 educational expenses. To learn more, visit pa529.com or call 800-440-4000.