Pennsylvanians concerned with the rising cost of higher education have a few days left to get the most out of their college savings dollar.
State Treasurer Rob McCord is urging families to contribute to a Pennsylvania 529 Guaranteed Savings Plan before Friday in order to take advantage of lower credit rates.
Credit rates will increase September 1 to correspond with the tuition increases set by colleges and universities.
“As the father of two boys, I know that you can’t always plan for everything that life throws at you, but you can start planning for the rising cost of higher education,” said Treasurer McCord. “Treasury’s Pennsylvania 529 College Savings Program can help families save for tomorrow’s higher education costs in a tax-advantaged way.
“Plus if families contribute to the PA 529 Guaranteed Savings Plan before August 31, they get the instant advantage of saving at this year’s lower credit rates. Those rates will go up September 1, so now is the best time to get the most ‘bang for your buck.’”
To help more families save for higher education, the McCord Treasury is offering free enrollment – a $50 savings – for all new PA 529 GSP accounts opened online during August and September at PA529.com. Use code “PlanToday” when prompted. The department is also offering a chance to win one of ten $529 college savings accounts at PA529.com.
The PA 529 Guaranteed Savings Program, or PA 529 GSP, is designed to help savings grow to meet the future cost of education. When used for qualified higher education expenses, PA 529 GSP contributions grow at the rate of tuition inflation (subject to fees and premiums). For example, if you save enough for one semester today at a State System of Higher Education university, you will have enough for one semester there in the future, no matter when or how much tuition has increased in the meantime.
Pennsylvania also offers a second 529 plan, the PA 529 Investment Plan, in which returns are based on financial market performance. The PA 529 Investment Plan features low fees and more than a dozen conservative and aggressive investment options from Vanguard, one of the nation’s largest financial services companies.
“I understand budgets are tight for many families, but even small contributions to your PA 529 account will help you meet the growing costs of higher education down the road,” said Treasurer McCord. “It also is important to remember you don’t have to do it alone.
Grandparents, aunts, uncles, and even friends can help contribute to your child’s PA 529 plan for holidays, birthdays, or any occasion, and they can take advantage of the generous tax deductions.”
Contributions to PA 529 plans are deductible from Pennsylvania income taxes, grow tax free, and, when used for qualified educational expenses, are federal and state tax exempt. Both plans provide flexibility to pay for college expenses at most higher education institutions across the country. Pennsylvanians may deduct contributions from their taxable income up to $13,000 per beneficiary, or up to $26,000 for married couples.
As an added resource, the PA 529 College Savings Program is offering a four-part webinar series titled “Pledge to their Future,” which provides information on how to maximize PA 529 savings and provides tips on how to reduce college costs. Those interested should visit PA529.com and click on “Webinars” to sign up.
For more information, visit PA529.com or call 1-800-440-4000 to open an account or make a contribution.
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