How the GSP Plan Works
When you put your money in the PA 529 GSP, the Pennsylvania Treasury Department does the investing work for you, placing money in a separate fund established by the Commonwealth of Pennsylvania.
Regardless of how these investments perform, your account growth―when used for qualified college expenses―is based on postsecondary tuition increases. This means that the Fund, not you, assumes the risk for covering postsecondary tuition inflation increases. Any growth is subject to a maturity period.*
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Either the account owner or the beneficiary must be a Pennsylvania resident at the time the account is opened.
Features & Benefits of PA 529 GSP
- Use your funds at most schools. Pay for postsecondary expenses at many colleges, universities, and community colleges, as well as graduate, career and technical schools in the U.S. and abroad. You can also pay for tuition up to $10,000 annually at K-12 public, private or religious schools. Visit fafsa.ed.gov to see eligible postsecondary schools or visit apprenticeship.gov.
- Pay for more than just tuition. Qualified postsecondary expenses include tuition, room and board, required books, supplies, equipment and fees, special needs services, and even principal and interest on a qualified education loan for a PA 529 beneficiary or sibling.
- Contribute with ease. Payroll deductions and automatic investing plans make saving even easier. Manage your account securely online anytime or call the PA 529 GSP (800-440-4000) to speak to a savings specialist.
- Low fees. The PA 529 GSP has an annual asset-based fee of .30% (capped at $250 annually) for accounts with email delivery of most plan documents. For accounts with mail delivery, the fee is .40% (capped at $500 annually). All accounts are subject to a minimum fee of $5 annually.
- Anyone can contribute. Parents, grandparents, aunts, uncles and family friends can all help cover the cost of your child's education.
How Much Should I Save?
The PA 529 GSP helps you know how much you need to save for postsecondary education, and how close you are to your goal, by choosing a tuition level when you enroll. You may choose from five different levels or a specific PA public school level, and you can change the tuition level at any time. The chart below compares the average annual cost of tuition today with expected costs in 10 and 20 years.
Whenever a change is made, your contributions are recalculated as if the new tuition level had been in effect since you opened your account. Most often the recalculation will change both your earnings rate and the dollar value of your account available to pay for qualified education expenses.
The chart assumes average annual tuition inflation rates: Community Colleges, 4.00%; State System of Higher Education, 3.75%; State-Related Universities Average, 4.50%; Private Four-Year Colleges, 5.25%; and Ivy League Colleges, 5.25%. Although these projections are based on historical and projected rates of tuition inflation at each type of institution, there can be no assurance that they will accurately reflect future increases. Projected tuition rates do not represent actual tuition costs at a specific school.
Frequently Asked Questions about the PA 529 GSP
*Note: If you are a PA 529 Guaranteed Savings Plan account owner and plan to use your account to pay for qualified K-12 expenses or qualified student loan repayment expenses, please call our customer service center at 800-440-4000.
When using your PA 529 GSP to pay for higher education, if your student is attending a Pennsylvania publicly funded school, before requesting a payment, you should check to see if the Tuition Level at which you have been saving matches the school your student will be attending. If it does not, you should change your Tuition Level. By making sure that your Tuition Level matches the public school being attended, you ensure that you will receive the account value to which you are entitled.
If your student is attending a private or out-of-state post-secondary school, your payment will be made based on your current Tuition Level (which you may change at any time). If you have not taken a qualified withdrawal from this account before, you also need to advise the PA 529 GSP that you intend to use your account.
You may change your Tuition Level and Enrollment Status online by logging in to your PA 529 Guaranteed Savings Plan account. You may also call customer service at 1-800-440-4000.
Once you have logged in to your account, select your student's GSP account and follow these steps:
- Click on "Change Your Tuition Level"
- On the first screen, select the average tuition level or the specific Pennsylvania publicly funded school to which you wish to set your account. (Note: You may not need to make a change on this screen if your beneficiary is attending the school your account is currently set at or is going to a private or out-of-state school.)
- Depending on your previous selection, you may need to determine if your beneficiary is in-state, out-of-state, in-district, or out-of-district. (Note: This screen will be skipped if you are saving at the private four-year or Ivy League average.)
- If your beneficiary is going to a private or out-of-state school, you will need to find their "non-participating institution" by typing the school name (or a portion of the school name) and clicking the "Search" button and selecting the appropriate location. If your beneficiary is attending a Pennsylvania publicly funded school (one that we have a tuition level for) you will simply want to skip this screen. (Note: “non-participating institution” simply means that the school is not a Pennsylvania publicly funded institution.)
- Confirm your student’s tuition level and click “Submit”.
After you have updated your Tuition Level and/or school of attendance you will be brought back to the main account screen and will need to update your student’s “Enrollment Status”.
To update your student’s Enrollment Status, click on the “View Profile & Documents” link from the left-hand menu to access account profile options and follow these steps:
- Click on the “Beneficiaries” link from the left-hand menu to access your student’s information and click “Edit”.
- Change the “Expected Withdrawal” setting to “Yes” and click “Next”.
- Verify your changes and click “Submit”.
After you have updated your student’s school of attendance and Enrollment Status, your account will be ready to make online qualified withdrawal requests or allow you to download a Payment Authorization Form to process a paper request. (Note: All requests for qualified withdrawals must include a copy of the student’s tuition bill.)
*In order for the growth on contribution to be used for qualified withdrawals, a "maturity period" ranging from approximately nine months to approximately eighteen months must elapse from the date that the contribution was made to the time the contribution was withdrawn to pay qualified education expenses. Please see the PA 529 GSP Disclosure Statement for more information.