State adds fees to school savings program

Beginning Saturday there will be big fee increases for Pennsylvania’s 529 Guaranteed Savings plan for college investors. Experts say it’s a sign of the difficult economic times.

Beginning Saturday there will be big fee increases for Pennsylvania’s 529 Guaranteed Savings plan for college investors. Experts say it’s a sign of the difficult economic times.

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[audio: 090904tmtreasury.mp3]

Pennsylvania’s 529 plan gives those saving for school the ability to pay for college at today’s prices, but carry those prices years or decades in the future. State Treasurer Rob McCord says instead of eliminating the 529 savings plan altogether, the state had to add hefty fees to make the college investment plan affordable for the state.

McCord: These guaranteed savings programs just saw a radical reduction in value and what we decided to do is mend not end the program some states just closed down the program we knew with disciplined investing and some additional programs we could just keep the program going for years to come.

Experts say the problem is just part of the deeper financial worries of the country. The fees can be 1,500 dollars a year or more.