HARRISBURG, PA — Pennsylvania is cutting a portion of the fees charged through its PA 529 Investment Plan from 0.05% to 0.045%, extending a series of reductions and waivers that the state says have saved families more than $29 million.
State Treasurer Stacy Garrity disclosed the latest reduction Thursday as part of College Savings Month. The Investment Plan is one of two options offered through Pennsylvania’s 529 College and Career Savings Program.
The cut follows the state’s decision last month to waive fees on PA 529 Guaranteed Savings Plan accounts for a fifth consecutive year. Many GSP accounts are also set to receive a $1,000 bonus contribution.
“With our latest fee reduction for the PA 529 IP and fees waived for our PA 529 Guaranteed Savings Plan again this year, we’re making it easier for Pennsylvania families to build their savings and prepare for future education costs,” Garrity said.
Treasury said repeated fee reductions and waivers during Garrity’s tenure have generated more than $29 million in cumulative savings for families using the two plans.
The PA 529 Investment Plan has received a Gold rating from Morningstar for three consecutive years.
PA 529 accounts can be used for qualifying expenses at technical schools, colleges and universities as well as K-12 education and certain apprenticeship and credential programs.
The accounts provide tax-free growth and qualified withdrawals under state and federal tax rules. Pennsylvania taxpayers can deduct annual PA 529 contributions of up to $19,000, or $38,000 for married couples filing jointly, from state taxable income.
PA 529 accounts are also exempt from Pennsylvania inheritance tax and do not affect eligibility for state financial aid, according to Treasury.
Pennsylvania children born in 2019 or later also receive an automatic $100 Keystone Scholars scholarship intended for post-high school education after they turn 18. Treasury invests the money until it becomes eligible for use.
Families can claim a child’s Keystone Scholars account at pa529.com/keystone.
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