PA's college savings plan weathers storm of bad economy
Friday, March 13th, 2009
By: Scott Detrow
While officials with Pennsylvania's state-sponsored college savings program say they've taken a hit in the markets, they insist the plan called "NowU" has enough assets to make it through at least the next eight years. WHYY's Scott Detrow reports.
Transcript:
The Dow Jones Industrial Average has dropped nearly 50 percent since spring of 2008, and that plunge has severely damaged government-backed savings programs in Alabama, Tennessee and other states. Kathleen McGrath, who heads the Treasury Department's Tuition Account Program Bureau, says Pennsylvania's college savings program is faring a bit better, but still lost 23 percent of its value in 2008.
McGrath says she doesn't have official figures for the past few months, but acknowledges the fund has lost more in 2009, as well.
McGrath: "What we're telling folks is that right now we have sufficient assets to cover all our obligations going out eight years. We do hope that the markets will recover in that time, and we also are talking to experts to see if there's anything we need to do to enhance the long-term viability."
NowU's assets aren't backed by the state – just the fund itself. McGrath insists the program will weather the recession, and begin earning investments when the stock market rebounds.
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