November 27, 2007
Contact:
 Anna Gustafson
717-787-2637
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Senate Update
by
Senator James J. Rhoades

According to the U.S. Department of Education's National Center for Education Statistics, the average cost for students to earn a college degree is now more than $14,000 a year. With the cost of a higher education rising each year, it is more important than ever for individuals and families to start planning well in advance to pay for college tuition and expenses.  

One popular way for families to save is through Pennsylvania's tuition account program, the nowU College Savings Program. Formerly known as TAP 529, the program has been improved to give participants more freedom to choose the best way to meet their individual education needs. NowU offers two ways for individuals to save for college: a Guaranteed Savings Plan that is guaranteed to grow at the same rate of college tuition inflation, or an Investment Plan that allows the individual to choose from 13 professionally managed portfolios.  

NowU also offers several tax advantages. Pennsylvania taxpayers can deduct contributions to a nowU account from their Pennsylvania taxable income up to $12,000 per year, or up to $24,000 for married couples if each spouse has a taxable income of at least $12,000. The growth of the account is not taxable if it is used for qualifying education expenses. Participants can contribute up to $60,000 a year, or $120,000 for a married couple filing jointly, without incurring the federal gift tax, and the money in the account is also exempt from Pennsylvania inheritance tax. 

Account holders may contribute whenever they want, in whatever amount, starting with as little as $25, and there are no age or income restrictions for the program. 

The nowU college savings program makes it easier for families to afford a college education, and I would encourage parents and prospective students to learn more about the program so they can start saving today. For more information, visit www.nowU529.com or call toll-free 1-800-440-4000 (Guaranteed Savings Plan) or 1-800-294-6195 (Investment Plan).

Senator Rhoades represents the 29th Senatorial District, which includes all of Schuylkill County and parts of Berks, Carbon, Lehigh, Monroe and Northampton Counties.