A Strategy for Saving

A child's first step is one of the most thrilling moments in a parent's life. It means a lifetime of exploration, discovery, and learning. It also means it's time for you to take the first step towards saving for education.

The cost of college. Higher education is getting more expensive, so you need to start saving early. This chart compares the average annual cost of tuition in today with expected costs in 10 and 20 years.

The chart assumes average annual tuition inflation rates: Community Colleges, 4.50%; State System of Higher Education, 4.25%; State-Related Universities Average, 6.00%; 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.

The value of college. Higher education costs a lot – but it pays off. During their working lives, college graduates earn 75 percent more than those without a degree. And college grads are less likely to face unemployment. People with higher education have greater job satisfaction, better health, and are more engaged with their families and communities.

Saving vs. borrowing. Every dollar you save today means less you'll need to borrow later. Even if you only save a little, you can reduce the crushing debt many grads face. A regular program of saving – starting small and starting early – will provide the boost your child will need. By starting today, you can put dreams of college within their reach.

Pick the Plan that Works for You

Saving for education is an important investment that will pay huge dividends throughout your child's life. But first, you need to figure out how. Many financial experts agree that 529 plans are the best option for most families.

The Pennsylvania 529 College and Career Savings Program offers two ways to save:

PA 529 Guaranteed Savings Plan (GSP) – A simple, lower-risk way to help keep pace with rising post-secondary tuition costs. Save at today's lower GSP credit rates. For example, if you save enough for a semester at one of the state universities today, you'll have enough for a semester at that school in the future – no matter when or how much post-secondary tuition has gone up in the meantime. The PA GSP offers five average post-secondary tuition levels to select from, and growth is based on post-secondary tuition inflation.

PA 529 Investment Plan (IP) – Returns on contributions are based on investment performance of your choice of 17 investment options ranging from aggressive to conservative, including age-based options which automatically progress from more aggressive to more conservative as your child approaches college age.

Employer Resources

Direct deposit. To retain the best workers, you need competitive benefits with low costs. At the same time, the rising cost of education has your employees scrambling to save – not just for children or grandchildren, but for their own professional growth.

Help your employees save for education! The PA 529 College and Career Savings Program offers payroll direct deposit at no cost. Your employees can deposit as little as $10 every paycheck – a quick and easy way to save for education.

Benefits of direct deposit

  • Improve job satisfaction – employee compensation becomes more than payroll
  • Demonstrate commitment – address employee concerns about their children's future
  • Give a tax break – PA state tax deduction lets employees deduct PA 529 contributions

No cost to you. PA Treasury administers the plan. We offer online enrollment via our Web site and payroll deduction. We also offer responsive customer support through our knowledgeable customer service representatives. Your employee can contribute via direct deposit, which you're probably using now!

PA Higher Education Savings Team. Our program representatives are here to help! We can help you develop a plan to communicate this new voluntary benefit option to your employees, assist your HR and Payroll departments, and answer any questions your employees may have. If now is not the right time for you to offer payroll deduction, we are available to help you provide information on the benefits and best ways to save for college.

Let us do the work:

  • Host webinars for employees before, during or after working hours on the importance of saving for education and the benefits of the PA 529.
  • Lead "lunch and learns" for employees on the importance of saving for education and the benefits of the PA 529.
  • Staff benefits fairs.
  • Provide educational materials for staff and employees, including fact sheets, brochures and posters.
  • Offer discounted enrollment for the PA 529 GSP (there is no fee to enroll in the PA 529 IP).
  • Special newsletters for HR professionals

PA 529 can provide your HR chapter, CEBS chapter, or other professional group with a free educational presentation:

The HR Office as a Financial Resource: Implementing College Savings as a Voluntary Benefit will show your HR team:

  • How to add college savings to the benefits package
  • How to assess employees' knowledge and perceptions of college savings
  • Benefits employees will receive by saving for college with a PA 529 plan

The presentation may be scheduled as an in-person event for your chapter, as an exclusive webinar for your members, or as a breakout session at your conference.

Contact us. Learn how we can help you offer the benefit of college savings to your employees.

Learn about PA 529 at Work or about offering PA 529 as a voluntary workplace benefit.

Call 1-800-440-4000 or e-mail us.

Estate Planning

A 529 savings plan isn't only for parents! Family members – including grandparents, aunts, and uncles – can open a PA 529 account to help fund a child's future education AND enjoy generous tax benefits.

You can make a dream come true. A student with a dedicated college savings account is seven times more likely to attend college than someone without such an account. Create a lasting legacy!

Retain control. Assets in your PA 529 account are excluded from your federal taxable estate, but you maintain complete control over them. If an unforeseen need arises, you can access your account – at any time, for any reason (taxes and penalties may apply). The beneficiary never gains ownership – at any age. Custodial accounts and trusts don't have this flexibility.

Control also means that you can change the beneficiary; the only restriction is that the new beneficiary must be a "family member" of the old beneficiary (as defined by the IRS; see the appropriate disclosure statement for more information). You may voluntarily give up control by transferring ownership of the account to any other person.

Accelerated gifting*. A special federal gift tax exclusion allows you to contribute a large sum in a single year. The IRS code allows for a five-year acceleration of the annual federal gift tax exclusion. This means that you can contribute up to $75,000 per taxpayer ($150,000 for married couples) per beneficiary in one year without incurring federal gift tax consequences. To take advantage of this opportunity, you simply elect to prorate a contribution of more than $15,000 evenly over five years on IRS Form 709. Of course, you can contribute any amount at any time, up to the maximum allowable account value subject to normal federal gift tax rules.

Enjoy tax advantages**

  • The entire value of your account is exempt from Pennsylvania inheritance tax. Depending on your heirs, that could be a savings of up to 15 percent.
  • Contributions of up to $15,000 per beneficiary per taxpayer are deductible from your Pennsylvania taxable income. For married couples filing jointly, $30,000 per beneficiary may be deducted if each spouse has taxable income of at least the amount deducted. There is no limit on the number of accounts to which you can contribute.
  • Earnings on your contributions are federal and state income tax free. You pay no state or federal income tax while the contributions in your account are growing. And, when used for qualified education expenses, you pay no federal or state income tax even when you make a withdrawal.
  • You can take advantage of these great federal and state tax benefits no matter your income.

High account maximum. You can build a college savings account of up to $511,758 for each of your beneficiaries. That's enough to cover the current cost for undergraduate and some, if not all, graduate schools at some of the nation's most expensive schools. So you can feel confident about fully funding college for those you care about!

*The availability of tax or other benefits may be contingent on meeting other requirements. A withdrawal or portion of a withdrawal, not used for qualified expenses may be subject to state and local income taxes. The earnings portion of the withdrawal will be subject to federal income tax and, with a few exceptions, an additional 10% federal income tax penalty.

**The availability of tax or other benefits may be contingent on meeting other requirements. Only the earnings portion of a withdrawal not used to pay for qualified expenses may be subject to federal income tax and a 10% federal penalty tax; the entire amount of the withdrawal may be subject to state and local income taxes.

Financial Professionals

Help address one of your client's top financial concerns – how to pay for education. Learn about the benefits of the PA 529 College and Career Savings Program.

When reviewing your client's current savings strategies, think about these unique benefits with the Pennsylvania 529 College and Career Savings Program. Only PA 529 accounts are:

  • Protected in state court proceedings from creditors
  • Not subject to Pennsylvania inheritance tax
  • Not counted against your clients for state financial aid purposes (savings in out-of-state 529 plans will be counted)
  • Eligible to earn free tuition discounts through the SAGE Scholars Tuition Rewards program

Financial data is available in the PA 529 College and Career Savings Program Annual Report (web version). See current investment performance for the PA 529 Investment Plan.

529 QuickView Access. PA 529 QuickView is a data-delivery website that gives you immediate online access to your clients' PA 529 IP accounts. No more sorting through stacks of paper, fumbling through files or waiting for the latest account information to be mailed.

PA 529 QuickView is easy to use and password-protected, so only authorized personnel have access to your clients' information. Learn more about PA 529 QuickView.

Additional Resources. Let the PA 529 do the work. Communicating with your clients about education savings should be part of a comprehensive financial relationship, and the PA 529 team is a valuable resource. Whether it is supplying your office with program material or conducting an exclusive presentation, we're here to help.

Working with a PA 529 program representative provides financial professionals with direct access to program information, and gives your clients FREE online enrollment in the PA 529 GSP. To learn more, email us at

Additional services include:

  • FREE online enrollment promo code for the PA 529 GSP (clients save $50)
  • PA 529 College and Career Savings Program marketing material
  • Access to free online webinars
  • Scheduling in-person meetings and presentations

Connect With Us

Phone: 800-440-4000


PA 529 College and Career Savings Program
613 North Drive | Room G-06
Harrisburg, PA 17120