HARRISBURG, PA--(Marketwired - August 15, 2013) - State Treasurer Rob McCord announced good news today for families saving for higher education with the Pennsylvania 529 Guaranteed Saving Plan (GSP). Due to the greatly improved financial status of the GSP Fund, which is now actuarially fully funded, fees and premiums are being reduced.
"Since taking office, I have worked hard to ensure that the PA 529 College Savings Program would be one of the top programs in the nation. The Pennsylvania 529 Guaranteed Savings Plan, in particular, continued its impressive improvement," Treasurer McCord said.
PA 529 GSP account owners who choose to receive account statements and notices by e-mail will see their account maintenance fee reduced to 0.35%, and the most an e-delivery account owner will pay is $250 per year. Account owners who elect to receive their statements and notices by mail will benefit from a 10% fee reduction to 0.44%. These changes take effect October 1, 2013.
Additionally, a 25% reduction in the GSP credit rate premiums for Penn State University, the University of Pittsburgh, and the State-Related Average tuition levels is effective immediately. The premium will be 6% for the upcoming 2013-14 academic year and is retroactive to contributions made since September 1, 2012.
The current 2% premium for Temple University tuition levels is being eliminated, effective immediately, and is retroactive for contributions made since September 1, 2012.
"I hope this good news will motivate families to open or contribute to an existing Pennsylvania 529 Guaranteed Savings Plan -- and, if they do so by August 31, they can take advantage of last school year's lower prices," Treasurer McCord said.
Credit rates will increase September 1 to correspond with the tuition increases set by colleges and universities. Contributions sent by mail must be postmarked on or before August 31. Online contributions must be made by 11:59 p.m. EST on August 31 at PA529.com, where you can also open an account.
Growth in the PA 529 GSP is based on tuition inflation. For example, if you save enough for a semester at one of Pennsylvania's State System of Higher Education universities today, you will have enough for a semester there in the future -- no matter when or how much tuition has increased in the meantime.
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 by August 31 at PA529.com. Use code SAVE when prompted.
In fiscal year 2012-13, families contributed more than $182 million to the PA 529 GSP, and as of June 30, the PA 529 GSP fund was worth $1.5 billion, a 7.721% increase over the previous year.
Pennsylvania also offers a second 529 plan, the PA 529 Investment Plan (IP), in which returns are based on financial market performance. 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.
Families contributed about $212 million to the PA 529 IP during fiscal year 2012-13, and assets in the PA 529 IP, as of June 30, were $1.3 billion, a 21.27% increase over the previous year.
With a record-breaking 177,491 open accounts, in fiscal year 2012-13, total program assets grew by 13.70% which totaled nearly $2.847 billion.
Treasurer McCord also announced the SAGE Scholars Tuition Rewards -- a benefit exclusive to Pennsylvania 529 account owners -- is increasing. The SAGE Tuition Rewards points earned on a PA 529 account are being permanently increased to 2.5% of the value of an account per quarter -- approximately 10% per year. SAGE Tuition Rewards points can be used to receive tuition discounts at more than 300 private colleges and universities nationwide, including more than 50 in Pennsylvania.
"Saving for college is something that most parents know they have to do, but they always think they have time," Treasurer McCord said. "I urge families to put time on their side and start saving today."
To learn more about either program, or to open and contribute to a PA 529 account, visit www.PA529.com or call 1-800-440-4000.
The Pennsylvania 529 College Savings Program sponsors two plans - the PA 529 Guaranteed Savings Plan (GSP) and the PA 529 Investment Plan. The guarantee of the PA 529 GSP 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 1-800-440-4000) to learn more about that plan, including investment objectives, risks, fees, and tax implications.