Treasurer McCord Says More Families Saving with PA 529 College Savings Program at Record Levels
Harrisburg – As more attention is placed on the current student loan debt crisis, Pennsylvania Treasurer Rob McCord reminds Pennsylvania families of one important strategy to help combat the rising costs of higher education: saving for college with the Pennsylvania 529 College Savings Program.
The program marked a strong, record-setting year for the fiscal year ended June 30, Treasurer McCord reported today as he chaired the quarterly Tuition Account Program Advisory Board meeting.
“With Americans' outstanding student loan obligations now greater than $1 trillion, Pennsylvania families are concerned about how they are going to afford their children’s education,” said Treasurer McCord, who added student loan debt now exceeds the total amount Americans owe on credit cards. “Saving for higher education offers enormous benefits compared to borrowing, and the Pennsylvania 529 College Savings Program can help.”
With a record-breaking 167,260 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. 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.
In fiscal year 2011-12, families contributed about $183 million to the PA 529 GSP, and as of June 30, the PA 529 GSP fund was worth nearly $1.4 billion, a 1.75% increase over 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 $175 million to the PA 529 IP during fiscal year 2011-12, and assets in the PA 529 IP, as of June 30, were more than $1 billion, a 13% increase over the previous year.
In fiscal year 2011-12, total program assets grew by 6.56%, which totaled nearly $2.5 billion.
“Higher education has become an economic necessity,” Treasurer McCord said. “The more you learn, the more you are likely to earn throughout your career, and the more likely you are to avoid periods of unemployment. I understand budgets are tight for many families, but even small contributions to a PA 529 account will help you meet the growing costs of higher education and increase your child’s shot of achieving economic security.”
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.
Media contact: Carrie Fischer Lepore, 717-772-2416 or news@patreasury.gov
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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.
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