(The Center Square) – Recently slashed fees on Pennsylvania’s educational savings program could save taxpayers more than half a million over the next year.
Treasurer Stacy Garrity said the 1.25 basis point reduction will impact 286,000 accounts enrolled in the state’s 529 Investment Plan, netting $579,000 in savings.
“Cutting these fees helps Pennsylvania families,” Garrity said. “I’m dedicated to making sure everyone saving with PA 529 has affordable, effective options to meet their education savings goals.”
The state’s 529 IP plans allow families to invest in their children’s education without the same taxes and penalties seen with many traditional investment and savings plans. While their initial purpose was to cover tuition and expenses for college, trade schools, and other post-secondary education, today funds can also be directed toward private K-12 expenses.
The reduction means that fees will now range from 0.1925 to 0.2925 percent. While families invested in the program have saved $6.9 billion for future educational expenses, they only represent a small fraction of the over 2.5 million Pennsylvanians under the age of 18.
“Today’s workforce needs highly skilled people – which requires training,” added Garrity, nodding toward efforts by the state to recruit more students into higher education, and ultimately, the dwindling pool of skilled laborers across the state.
As lawmakers strive for commonsense legislation that will help more students move forward with their education after high school, affordability is a top priority. Recently, the state’s Senate passed a bill mandating FAFSA completion for seniors, a move which — if passed by the House and trends in other states hold true — could increase overall enrollment rates.