HARRISBURG – State Rep. Camille “Bud” George, D-74 of Houtzdale, said savings on college investments can be achieved by making contributions to the state’s tuition-account program before Sept. 1.
“Higher rates will take effect on Sept. 1, so those able to contribute more to an existing Guaranteed Savings Plan before then will be purchasing college credits at the current prices,” Rep. George said. “While the account owners are usually parents, anyone — relatives, friends and even the beneficiary — may contribute to an account.”
To take advantage of the lower rates, contributions to a Guaranteed Savings Plan must be postmarked no later than Aug. 31. Assistance is available by calling 800 440-4000 toll free from 8 a.m. to 6 p.m., Mondays through Fridays. Information is available online at www.tap529.com.
Beginning Sept. 1, the credit rate average for the 14 State System of Higher Education universities, which include Lock Haven, Clarion and the Indiana University of Pennsylvania, will increase by 2.7 percent to $209.92 from the current rate of $204.41.
Credit rates for community colleges will increase an average of 3.4 percent to $80.64. The University of Pittsburgh and the Pennsylvania State University, University Park campus, rates will increase by more than 5 percent, to $473.67 and $504.97, respectively. Tuition increases for private colleges will average 6.6 percent, or about $905 a credit.
“College costs are staggering, but moderating,” said George, who credited the state Treasury Department, which administers the TAP 529 program, for the more-reasonable increases. “Four years ago, tuition increases averaged 9 percent at the State System schools and more than 13 percent at Pitt and Penn State.”
Rep. George noted that the Treasury Department was able to eliminate credit-rate surcharges, retroactive to Sept. 1, 2005, on Guaranteed Savings Plans. The premium also has been eliminated for the 2006-07 academic year.
This summer, the state Legislature passed, and Gov. Edward G. Rendell signed into law, legislation enabling taxpayers to deduct up to $12,000 for each beneficiary — up to $24,000 if filing jointly — from state income taxes for contributions to Guaranteed Savings Plans or other eligible college-saving plans. Congress also extended the federal tax exemption for qualified withdrawals.