SOURCE: Pennsylvania Treasury

Pennsylvania Treasury

December 17, 2015 08:52 ET

Holiday Alert: Make Your Holiday Gift Giving Easy: Turn Spending Into College Savings With a Pennsylvania 529 College Savings Account and Save the $50 Enrollment Fee to Open a PA 529 GSP

HARRISBURG, PA--(Marketwired - December 17, 2015) - State Treasurer Timothy Reese today encouraged Pennsylvanians to give the gift of education this holiday season by opening or contributing to a Pennsylvania 529 College Savings Program account. The Pennsylvania 529 College Savings Program sponsors two plans -- the PA 529 Guaranteed Savings Plan (GSP) and the PA 529 Investment Plan (IP).

"Pennsylvania's families are working harder than ever to find a way to pay for higher education and continually look for the best way to do so," Treasurer Reese said. "With the PA 529 College Savings Program, you can give a meaningful gift this holiday season and save time on your holiday shopping. It doesn't get better than that!"

For the 2014-15 academic year, the average cost of tuition in Pennsylvania's 212 public, private and community colleges was $20,000. Pennsylvania has the fifth highest tuition costs in the country, according to the CollegeCalc's website. And Pennsylvania students face an average loan debt of $33,264, the third highest loan debt in the country. Nationwide, the average loan debt is $28,950, according to The Institute for College Access and Success.

Both the GSP and IP provide flexibility to pay for college expenses at most higher education institutions across the country. The primary difference between the two plans is the way savings grow.

Growth in the PA 529 GSP is based on tuition inflation. Save enough for one, 10 or even more credits today and have enough to pay for that many credits in the future, no matter how much tuition has increased in the meantime. Go to PA529.com and use enrollment code 2015 to save the $50 enrollment fee to open a PA 529 GSP through December 31, 2015. The PA 529 IP, features low fees and more than a dozen conservative and aggressive investment options from The Vanguard Group, one of the nation's largest financial services companies. There is no enrollment fee for the PA 529 IP. Financial market performance is the basis for returns on the IP.

PA 529 plans grow tax free and when used for qualified higher education expenses, such as tuition, room and board, mandatory fees and text books, are tax exempt. Some restrictions apply, see the plan disclosures.

Paying for college with loans could cost Pennsylvania families nearly four times more than using savings from a PA 529 account. Saving just $58 a month for 20 years, totals $13,920. With annual tuition inflation of 6.53 percent, this would give the student $27,110 in savings. Borrow $27,000 and repay that loan over 20 years at six percent interest at $224 monthly and the total is $53,763. Get $27,000 by saving $58 a month for 20 years starting now or by repaying loans at $224 a month for 20 years starting later. The choice is easy. 

 "Pennsylvania's 529 plans offer families way to save for higher education, and secure their child's future through a college education. Pennsylvania's 529 College Savings Program is one of the finest of its kind in the country, making it one of the best gifts you can give to a loved one this holiday season. It is a gift that will continue to grow," Reese said.

To learn more, or to contribute to or open a PA 529 account, and to read the disclosure statements, visit www.PA529.com or call (800) 440-4000.

The Pennsylvania Treasury is an independent department of state government led by the state treasurer, who is elected every four years. The department's primary duty is to safeguard and manage the state's public funds. It invests state money to generate income on behalf of the citizens of Pennsylvania, reviews and processes payments for state government agencies, and serves as custodian of more than $100 billion in state funds. Key Treasury programs include Unclaimed Property, PA 529 College Savings Program and the Board of Finance and Revenue.

To learn more visit patreasury.gov. The Pennsylvania 529 College Savings Program sponsors two plans -- the PA 529 Guaranteed Savings Plan (GSP) and the PA 529 Investment Plan (IP). The guarantee of the PA 529 Guaranteed Savings Plan is an obligation of the GSP Fund, not the Commonwealth of Pennsylvania or any state agency. Before investing in either plan, please carefully read that plan's disclosure statement (available at www.PA529.com or by calling (800)440-4000) to learn more about that plan including investment objectives, risks, fees and tax implications.

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