Pennsylvania lowers minimum contributions for college savings plans

In the category of “every dollar counts and you have to start somewhere,’ Pennsylvania Treasurer Joe Torsella this week announced his office is reducing the minimum contribution to the state’s 529 college savings programs to $10.

The 529 guaranteed savings program, which allows families to bank college credits for the future at today’s prices, previously carried a $15 minimum contribution. The separate 529 investment program required a $25 minimum contribution.

A Torsella spokesman said the minimum contribution was lowered to $10 to help make the programs, which allow savings to grow tax free, more accessible to low-income families.

Despite high unemployment rates, families have continued to tap the college savings programs during the pandemic. State records show families saved $162 million in PA 529 accounts between March and June. That is about $2 million more than what families saved during this same period in 2019.

Torsella said investing in such plans can help reduce growing college debt levels. According to the most recent figures from The Institute for College Access and Success, Pennsylvania college graduates in the class of 2018 carried the second-highest debt level in the nation, with the 65% of Pennsylvania graduates carrying slightly more than $37,000 in debt.

“In good times and hard times, the biggest barrier to saving for a future is knowing how to start,” Torsella said. “Now, Pennsylvania families need just $10 to begin saving for their child’s future. “