Families contributed nearly $310 million to Pennsylvania 529 College Savings Program
HARRISBURG, Pa., Jan. 25, 2011 /PRNewswire-USNewswire/ -- Amidst continuing economic challenges, Pennsylvania families last year displayed a remarkable commitment to saving for their children's future. These families invested more than $309.8 million in Pennsylvania's 529 College Savings Program, a 5% increase from 2009.
"My kids will both go off to college within the next four years, so I take the stressful challenges of saving for college personally," Treasurer McCord said. "I'm thrilled the Pennsylvania 529 College Savings Program helped parents rise to meet college-saving challenges in 2010. This past year, they invested in those they love at a record pace."
"Last year alone, families invested a total of $309.83 million in Pennsylvania's 529 College Savings Program – $152.36 million to the PA 529 Guaranteed Savings Plan (GSP) and $157.46 million to the PA 529 Investment Plan (IP). This is a 5% increase in contributions at a time when household budgets still reflect our sluggish economic recovery," Treasurer McCord noted.
Sponsored by the Commonwealth of Pennsylvania and administered by the Pennsylvania Treasury, the Pennsylvania 529 College Savings Program offers two distinct 529 plans to meet the needs of nearly anyone who wishes to save for college – the PA 529 Guaranteed Savings Plan and the PA 529 Investment Plan. At the end of 2010, assets under management for both plans totaled $2.164 billion – an increase of 17.5% since 2009.
The primary difference between the two plans is the way savings grow. In the PA 529 GSP, growth is tied to the rate of college tuition inflation, and in the PA 529 IP, investment returns are determined by the performance of financial markets and investment fund portfolios. Both plans provide important tax benefits, such as tax-free growth and withdrawals if used for qualified higher education expenses like tuition, books and supplies.
According to Sallie Mae's study "How America Saves for College 2010," nearly nine of ten parents said it was likely their child would attend some form of higher education, with 72 percent saying it was very likely. Supporting these ambitions with actual college savings sends a strong message; academic research shows that children who have a savings account in their names are seven times more likely to attend college than those who do not.
"Pennsylvania parents believe in their children, and this year, they invested in them at an impressive rate," said Treasurer McCord.
For many families, 2010 was the year to start saving for college, with 16,649 new PA 529 accounts opening in 2010 – 8.6% more than the prior year. Other families chose to give the gift of education or reap some last-minute tax benefits by contributing to a PA 529 account in December. December was a record breaking month in the 18-year history of the PA 529 College Savings Program – families contributed nearly $52 million and opened 3,112 new accounts.
This year's tremendous saving effort and strong investment returns both helped fortify the PA 529 GSP, as the plan has steadily regained its actuarial footing and now stands at 96.34% funded. Treasurer McCord continues to succeed in his efforts to preserve the long-term viability of this important college savings vehicle.
For more information or to open an account, please 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 and the PA 529 Investment Plan. 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. Please read the disclosure statements by visiting www.pa529.com or calling 1-800-440-4000 to learn more about the plans including investment objectives, risks, fees, and tax implications.
SOURCE Pennsylvania Treasury Department