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Pennsylvania State Treasurer Joe Torsella lowered the minimum contribution for the PA 529 College and Career Savings Program (PA 529) to $10. Previously the minimum contribution amount for the Guaranteed Savings Plan (GSP) was $15, and the Investment Plan’s (IP) was $25.
“In good times and hard times, the biggest barrier to saving for a future is knowing how to start. Now, Pennsylvania families need just $10 to begin saving for their child’s future. Pennsylvania graduates carry some of the highest student debt loads in the nation. By starting early with just $10, families can grow those savings over time and reduce the amount of debt their children may have to carry”, said Treasurer Torsella.
The PA 529 GSP is a lower-risk savings option where returns are based on tuition increases. GSP account owners save for future tuition rates at today’s prices, by purchasing tuition credits in real-time.
The PA 529 IP includes 17 different investment options, including 3 age-based options, through Vanguard. This variety allows families to choose the level of investment risk they are most comfortable with. The IP also has some of the lowest fees when compared with similar plans in other states.
The PA 529 IP recently earned a top-ten ranking by SavingForCollege.com for one-year performance. Additionally, in 2019, the IP was recognized with a Morningstar Bronze Rating. This rating puts the IP plan among an elite group of Top 529 College Savings Plans for 2019 analyzed and rated by Morningstar.
Account owners also receive numerous tax benefits including federal and Pennsylvania tax-free growth and tax-free withdrawals for qualified expenses, contributions that are deductible from PA state income taxes and account balances that are exempt from state inheritance tax. Assets in PA 529 accounts do not count against families when determining state financial aid eligibility, a benefit that is exclusive to PA 529.
In addition, all babies born or adopted to a PA family after December 31, 2018, receive a $100 starter deposit to a PA 529 account, as part of Treasurer Torsella’s Keystone Scholars program.
Families currently have more than $5.5 billion in assets invested in PA 529 accounts. Over the life of the PA 529 program, it has paid out more than $4 billion in qualified education expenses.