HARRISBURG, PA--(Marketwired - August 06, 2014) - State Treasurer Rob McCord today reported that the Pennsylvania 529 College Savings Program marked a strong, record-setting fiscal year in terms of number of accounts and total assets.
"More families than ever before are realizing that one of the only ways truly to combat the rising costs of higher education is to save for those expenses -- as early and often as possible," said Treasurer McCord, who added that Pennsylvania ranks third in the nation in average college debt per student. "On average, Pennsylvania students leave school with $31,675 in student loan debt. Nothing says, 'Welcome to the real world,' quite like that."
Treasurer McCord reminded families that saving for higher education offers enormous benefits compared to borrowing, and the Pennsylvania 529 College Savings Program can help.
With a record-breaking 188,039 open accounts, the PA 529 College Savings Program provides two ways to save: the PA 529 Guaranteed Savings Plan (GSP) and the PA 529 Investment Plan (IP). The primary difference between the two plans is the way savings grow.
Growth in the PA 529 GSP is based on tuition inflation. The plan lets an account owner save for tomorrow's college expenses at today's plan rates -- without worrying about the ups and downs of the stock market.
In fiscal year 2013-14, which ended June 30, families contributed about $191.2 million to the PA 529 GSP. As of June 30, the PA 529 GSP fund was worth $1.69 billion, a 12.21 percent increase over the previous year.
Due to the GSP Fund's strong performance, Treasurer McCord announced that the third quarter account maintenance fee will be waived for all PA 529 GSP account owners. He added that account owners who are registered for e-delivery by Sept. 30, will receive the account maintenance fees that were paid in the previous year.
Returns in the PA 529 IP 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 $243.5 million to the PA 529 IP during fiscal year 2013-14, and assets in the PA 529 IP, as of June 30, were more than $1.68 billion, an increase of 25.9% percent over the previous year.
For the fiscal year, total program assets grew by 18.65 percent, which totaled nearly $3.38 billion. The total number of open PA 529 College Savings Program accounts increased by 5.94 percent compared to June 30, 2013.
To encourage more families to start saving, the McCord Treasury is offering free enrollment -- a $50 savings -- for all new PA 529 GSP accounts opened by Aug. 31, 2014. Families can use the code SAVE when prompted. The department is also offering a chance for families to win one of five $529 college savings accounts at PA529.com.
The Treasurer added families that wish to learn more about the benefits of a 529 plan can register for free college savings webinars at PA529.com. The online presentations allow users to have their questions answered by a PA 529 college savings expert.
For more information, visit PA529.com or call 1-800-440-4000 to open an account or make a contribution.
The Pennsylvania 529 College Savings Program sponsors two plans-the Guaranteed Savings Plan (GSP) and the 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 1-800-440-4000) to learn more about that plan, including investment objectives, risks, fees, and tax implications.
- Banking & Budgeting
Carrie Fischer Lepore