HARRISBURG — Treasurer Stacy Garrity recently announced that the minimum contribution to open a PA 529 College and Career Savings Program account has been completely eliminated.
“My goal is to make PA 529 accounts available to everyone in Pennsylvania who wants one,” Garrity said. “Allowing families to open a PA 529 account with no deposit will give everyone the opportunity to start saving for education.”
Once a PA 529 account is opened, future contributions can now be any amount – as little as $1. This reduction marks the second time since July 2020 that the amount has been reduced and is 90 percent less than the previous $10 minimum.
“Today, more than ever, education doesn’t necessarily mean a four-year degree, and PA 529 plans are here to help no matter which path a child takes,” Garrity said. “PA 529s can help pay for community colleges, technical schools, or apprenticeship programs around the corner or across the country. Every dollar saved today is one less that must be borrowed tomorrow, meaning less student debt for future generations entering the workforce.”
Contributions can be made to PA 529 accounts online via electronic bank transfer, through the mail by check or money order, or by setting up a simple automatic contribution from a bank or paycheck.
Saving with PA 529 offers account owners generous tax benefits and the flexibility to choose the plan that works best for their budget and will help achieve their unique education goals. Assets saved in PA 529 accounts have no impact on Pennsylvania state financial aid eligibility.
PA 529 accounts can be used to pay for more than just tuition, including fees, equipment, books, room and board, and other qualified higher education expenses.
PA 529 account owners can choose to save with the PA 529 Investment Plan (IP) or the PA 529 Guaranteed Savings Plan (GSP). The PA 529 IP lets account owners choose from various investment options, including target enrollment date portfolios that rebalance investment asset allocations automatically as a beneficiary approaches their anticipated enrollment date. The PA 529 IP earned a Silver Rating from Morningstar, making it a best-in-class plan. The PA 529 GSP is a lower-risk plan where returns are tied to college tuition inflation, helping families save at today’s tuition rates to cover future expenses.
Both plans offer the same tax advantages including a Pennsylvania state income tax deduction, no taxes paid annually on earnings, no income tax paid on growth when used for qualified expenses, as well as gift and Pennsylvania inheritance tax benefits.