Hickernell Promotes Helpful College Savings Plan for Parents
Noting that only 32 percent of families now feel confident they can achieve their college savings goals, state Rep. Dave Hickernell is encouraging residents to obtain information about nowU, Pennsylvania’s 529 College Savings Program.
“As the parent of a college student, I understand the difficulties families face in paying for college,” said Hickernell. “The nowU program is an excellent tool for families to invest and save for college.”
Formerly known as the TAP 529 Pennsylvania Tuition Account Program, more than 25,000 Pennsylvania families were able to save money for their children’s education by investing in the TAP 529. In its 15 years of existence, the program paid out more than $367 million in benefits.
NowU offers the same two ways to help individuals save for the ever-growing costs associated with obtaining a college degree: a guaranteed savings plan (GSP) and an investment plan. Though tuition increases typically vary from school to school, average projected increases have been as high as 7 percent, which far outpace national inflation rates.
The GSP is helpful for families who want to keep pace with tuition inflation while the investment plan gives college savers the choice of 13 different investment options, from conservative to aggressive.
Participants also receive a host of generous tax breaks including a state tax deduction of up to $12,000 for their contributions to qualified tuition account programs. Earnings are tax deferred, meaning they are not subject to yearly taxation for either federal or Pennsylvania income taxes. Contributions to the GSP qualify for up to a $12,000 annual gift tax exemption and all contributions are exempt from Pennsylvania inheritance tax.
Grants and scholarships can often help students meet their needs, but they are not a guarantee to being able to pay for a higher education. Saving, even a small amount, is better than borrowing money with large interest payments.
More information for both the GSP and the investment plan are available by visiting Hickernell’s Web site at RepHickernell.com and clicking on “nowU College Savings.”
Rep. Dave Hickernell
Pennsylvania House of Representatives
House Republican Public Relations
FOR IMMEDIATE RELEASE
June 3, 2008