GSP Premiums Put on Hold

Pennsylvania Treasury Department was set to impose higher rates for college credits today for its tuition investment program but Treasurer Rob McCord has extended the deadline until September 12th. Each year the Pennsylvania 529 Guaranteed Savings Plan (GSP) sets investment rates based on tuition increases at community college, state, state related and private universities based on average tuition increases and return on state investments. This year the plan was to not only increase the rate to match higher tuition prices but also add a surcharge for some categories. Notification of the new rates did not get to some homes until last week. McCord felt that did not give parents enough time to make last minute investments. The premise of the program is to allow parents to buy college tuition credits at today’s rate to be redeemed tax-free in the future when the child goes to school. The state hopes to cover the difference in tuition costs through the return on investments but the downturn in the stock market has put the plan behind its goal. That prompted the decision to add the surcharge for state related university credits. The Treasury Department says it will also waive the $50 enrollment fee for any new account opened before October 13.