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Encouraging an early start for saving is good for Pennsylvania.

The Issue:
A new effort provides $100 toward each child’s future higher education expenses.

Our Opinion:
Encouraging an early start for saving is good for Pennsylvania.

We understand if many people weren’t exactly overwhelmed by the news that each baby born or adopted into a Pennsylvania home after Jan. 1 is entitled to $100 toward future higher education expenses. There’s no denying that $100 doesn’t buy much on a college campus these days.

But we urge people to look beyond the size of the grant to see the value of the bigger idea behind the state Treasury Department’s Keystone Scholars program, which has been expanded statewide after being tested in six counties.

Those who want the $100 must sign up for a PA 529 college savings account to qualify. The scholarship grant amounts to seed money for each college savings account. From there it’s up to families to build the account. Even small contributions can add up. Treasury officials noted that a participating family that puts just $25 a month into the account should have about $10,000 by the time their child is ready for school.

Parents can apply for the program online at

We’re enthusiastic about the Keystone Scholars idea because it encourages people to save for college and to start early. It also raises awareness of the benefits 529 accounts offer. Most notably, earnings are not subject to federal or state income taxes when used for qualified education expenses such as tuition, fees, books and room and board at an eligible education institution.

Such programs have been around for decades, yet a survey by the investment firm Edward Jones found that fewer than a third of Americans could even identify a 529 plan as an education savings tool. Only 7 percent of eligible households in Pennsylvania participate in PA 529. Even accounting for families who invest in other states’ college savings programs, there’s plenty of room for increased participation. We expect that the prospect of getting handed $100 will make Pennsylvania’s program much more familiar to state residents with children who qualify.

Any head start toward college savings should make a difference in addressing a serious problem. Pennsylvanians have the highest student loan debt load per person of any state in the nation, at $35,759, and 68 percent of Pennsylvania college graduates leave school in debt, according to the Institute for College Access and Success.

And this isn’t just about college-bound students. Money saved in PA 529 accounts can be used to pay for education at community colleges and accredited trade and vocational programs as well as four-year colleges and universities. It’s impossible to predict exactly what kind of skills people in our next generation will need as they come of age, but we’re certain that education is going to be essential, as it already is today. Good-paying jobs typically demand advanced training and skills, whether it’s employment in a manufacturing plant or in an office. According to Keystone Scholars, a child with education savings at birth is more likely to pursue and complete some form of education after high school.

The money for this program is coming from donors along with existing surplus investment earnings within the PA 529 program.

We congratulate the Treasurer’s office and the other supporters of the program for developing this most promising idea. A better educated, better trained future workforce is good not just for Keystone Scholars beneficiaries but for everyone in Pennsylvania.