PA 529 Savings Programs
Thousands of college students across the state are starting their fall semester this week. Whether you have a child beginning kindergarten or in college, the realization of the price for a higher education is unsettling. Americans owe more than $1 trillion in student loan debt and the number keeps growing. In fact, student loan debt now exceeds the total amount Americans owe on credit cards.
Recently, the Pittsburgh Post Gazette published an article about how college graduates typically earn more than non-college graduates, however, these same individuals are more likely to be ineligible for a home mortgage due to a high debt-to-income ratio because of student loans. More than ever, it’s important to make sure our future generations are given the tools to be successful. Fortunately, there is another way to pay for college that is more affordable than borrowing and that offers tremendous tax benefits.
For nearly 20 years, the PA 529 programs have played a critical role in helping families with the rising cost of college tuition. Sponsored by Pennsylvania and administered by the PA Department of Treasury, this savings program provides two ways to save: the PA 529 Guarantee Savings Plan (GSP) and the PA 529 Investment Plan (IP). The primary difference between the two plans is the way savings grow.
The PA 529 GSP is designed to help an individual’s college savings grow and keep pace with rising tuition. The way GSP works is that the Pennsylvania Treasury Department hires professionals to invest the money for the beneficiary’s account. Regardless of how well or poorly these investments do, the beneficiary’s account grows at the rate of tuition inflation. So if you save enough with the PA 529 GSP for one semester today, you will have enough for one semester in the future – no matter when or how much tuition has increased in the meantime.
The PA 529 IP program is a more aggressive choice since the returns are based on the financial market performance. Families can choose from a lineup of 13 investment options that are all managed by Vanguard, one of the nation's largest financial services companies. Over time, families can adjust their assets in the IP program from the aggressive options to more conservative as the beneficiary nears college age. The PA 529 IP features low fees and there is never an enrollment cost for the program.
A PA 529 savings plan can be created for anyone: a child, grandchild, friend or even yourself. All income levels are eligible for the savings plan with contributions as little as $25, or $15 if contributing through a payroll deduction. No matter which plan is chosen, families will receive tax-deferred growth on earnings and tax-free withdrawals when funds are used for qualified educational expenses such as tuition, books, certain room and board expenses and supplies.
The following chart estimates how much would need to be saved each month for 18 years to cover tuition:
Many individuals are surprised to learn that a PA 529 GSP and IP account is not included in determining eligibility for Pennsylvania state financial aid. This savings plan is also accepted at any school that is accredited and eligible to receive federal financial aid which is nearly all colleges and universities, community colleges, and career or technical schools. In addition, there is no maximum age for a PA 529 plan and assets may be used at most schools offering adult career training or advanced degrees, including part time programs. Families can always withdrawal the money invested into a PA 529 at any time for any reason.
A record number of families are saving at record levels with the program statewide. The PA 529 savings plan currently serves over 163,000 accounts with $2.5 billion in assets. As an incentive to help families get started, the Pennsylvania Treasury Department is offering free online enrollment in the PA 529 Guarantee Savings Plan – a $50 savings – by typing in “Inspire” at www.PA529.com, by September 30th, to take advantage of this offer.
Pennsylvania has seen historic budget cuts to public higher education over the last two years and because of that, many schools across the state have raised tuition. Now is the time to start exploring this successful savings plan Pennsylvania offers so the next generation can obtain a quality education without a future of overwhelming debt.
Voter ID Update
In last week's edition of my News & Views I discussed the importance of helping citizens in need of a voter identification card and called on the Corbett administration to authorize neighborhood centers. I wrote the Governor and respectfully asked for consideration of this idea, either creating these neighborhood centers or authorizing state offices, including elected officials’ offices, to provide these photo identification cards.
I have yet to hear directly from the Governor’s office, or anyone in his administration, on my request. In an interview with WITF Radio in Harrisburg, a spokesperson for the PA Department of State cited the need to keep individuals’ personal information private as the reason not to open neighborhood centers or authorize our offices to provide the photo identification cards.
If confidentiality of information is the objection, then why can’t our offices be partners with PennDOT in securing photo identification cards for voters? Our offices routinely assist constituents with issues that require them to provide personal information, much the same way a PennDOT facility would. During the second quarter of 2012, the Democratic caucus processed nearly 2,000 constituent requests through PennDOT, with 125 of those requests being processed by my office. An individual’s personal information is not compromised in any way when they visit one of my district offices. It would be completely reasonable for my staff to assist a voter in need of a photo identification card by collecting the appropriate forms, taking a photograph and scanning the information directly to PennDOT so they could produce the photo identification
card. Once PennDOT received the information, and verified the birth records, they could then mail the new identification card directly to the voter. There are 20 states in the United States that mail licenses and identification cards to its intended recipient.
There are 253 members of the legislature with offices in communities all across the Commonwealth and many of these offices have notaries on staff, computers, cameras, and the technology to assist voters seeking photo identification. Authorizing these offices to assist, or creating neighborhood centers, would ease the burden for a voter to have to go to a PennDOT location.
School Bus Safety
Yellow school buses that transport students from home to school have re-appeared with the start of classes at most schools around the Commonwealth. If you are driving in areas with a high concentration of students waiting for the bus, please slow down and be careful. Parents and students can visit Just Drive PA to view tips offered by PennDOT for kids to stay safe while riding the bus. I also want to remind motorists of the state’s School Bus Stopping Law:
- Motorists must stop at least 10 feet away from school buses that have their red lights flashing and stop arm extended
- Motorists must stop when they are behind a bus, meeting the bus, or approaching an intersection where a bus is stopped
- Motorists following or traveling alongside a school bus must also stop until the red lights have stopped flashing, the stop arm is withdrawn, and all children have reached safely
- If physical barriers such as grassy medians, guide rails or concrete median barriers separate oncoming traffic from the bus, motorists in the opposing lanes may proceed without stopping
- Do not proceed until all the children have reached a place of safety
The penalties if convicted of violating Pennsylvania’s School Bus Stopping Law include:
- $250 fine
- Five points on your driving record
- 60-day license suspension
All Senate offices will be closed on Monday, September 3rd in observance of Labor Day. My district offices will re-open as scheduled on Tuesday, September 4th.
Students Bringing Communities Together
The start of another school year for students means homework, new teachers, and meeting new friends. School being back in session also allows parents and communities to come together around various school activities and initiatives and support the students in their respective neighborhoods. One way parents and communities support their schools is by attending school sporting events and cheering on their children, their neighbors, or in many cases, complete strangers, all in the name of supporting their local school and their community.
Last year, I attended a basketball game at Sto-Rox High School as they hosted Montour. Both teams were having great seasons when they played. The gymnasium at Sto-Rox that night was filled beyond capacity and the excitement in the communities that those two schools represent in the days leading up to the game was contagious. The sense of community spirit and unity that night was impressive.
This same sense of community and unity has existed on Friday nights during the fall in western Pennsylvania for many years with the high school football season. Stadiums around the area are filled with tens of thousands of people on Friday nights. Parents, friends, neighbors, football enthusiasts looking to catch a game, and prideful residents supporting their school and community come together around young people who not only have a talent, but give an extraordinary amount of time and effort on behalf of their school. The players, band members, cheerleaders, pep teams, coaches, trainers and all of the students should be commended and appreciated for their efforts, which help bring communities together.
I wish all the student athletes competing on behalf of their schools, in all sports, the best of luck this season both in the classroom and on the playing field. If you’re interested in supporting your community on Friday nights this fall, attend a game and let these kids know you appreciate their efforts.
Week 1 High School Football Schedule:
Did You Know…
Did you know according to the National Federation of State High School Associations (NFHS) more than 7.6 million high school students in the United States played sports during the 2010-11 school year, accounting for nearly 55.5% of all high school students?
Friday, August 31st
Baldwin @ Peters Twp., 7:30 p.m.
Chartiers Valley @ Moon, 7:30 p.m.
Hopewell @ Montour, 7:10 p.m.
Keystone Oaks @ Steel Valley, 7 p.m.
Seton-La Salle @ South Allegheny, 7:30 p.m.
Brentwood @ Serra Catholic, 7:30 p.m.
Carlynton @ Ft. Cherry, 7:30 p.m.
Imani Christian @ Bishop Canevin, 7:30 p.m.
Riverview @ Northgate, 7:30 p.m.
Slippery Rock @ Brashear, 7 p.m.
Sto-Rox @ Shenango, 7 p.m. (Saturday)
18 Days Until FontanaFest! – Join us on Saturday, September 15th from 11 a.m. to 4 p.m. at South Side’s Riverfront Park (bottom of 18th Street at the river) for a FREE day of family fun! Enjoy FREE food and drink, entertainment, door prizes, numerous booth sponsors, games for kids and much more! The Pittsburgh Water Limo will be offering rides on our rivers between 12:30 and 2:30 p.m. and the PA Fish & Boat Commission will be providing canoes so families can enjoy a smooth ride on the Monongahela. Over 30 participating organizations will be on hand providing activities for people of all ages. Please visit www.fontanafest.com for updates on the day’s events, sponsor information and a listing of participating organizations.
Happenings in Beechview
Every Saturday from 9 a.m. – 1 p.m., stop by the Beechview Marketplace featuring a flea market, vendors, crafts and more. The Marketplace is held in the IGA Market on Broadway parking lot. For more information, or to register as a vendor, please call 412-341-8768 or email email@example.com.
The Beechview Historical Society is having a public photo scanning event and meeting on October 6th at 11 a.m. at the BREW on Broadway. Anyone interested in preserving Beechview’s history while looking forward to the future is welcome to attend.
Run (or Walk) Your Rox Off!
It is not too late to register for the 4th Annual Run Your Rox Off 5K and 1 Mile Run/Walk scheduled for this Friday. This event provides an evening of fun and festivities and a chance to give back to the community. All proceeds from the event benefit the McKees Rocks Community Development Corporation and its mission to continue the revitalization of McKees Rocks and Stowe.
The race starts at 6:30 p.m. with a free concert, petting zoo and face-painting for children, among other activities, beginning after the race. You can register for the race online. For more information please call 412-331-9900 or visit the McKees Rocks Borough website.
The first Labor Day parade in the United States was held in New York City on September 5, 1882.
Offices of State Senator Wayne D. Fontana