529 College Savings Plans

Programs established and maintained by a state (or college) and recognized under Internal Revenue Code Section 529.

Account Owner

The person who opens an account with a 529 college savings plan and controls the assets held in the account.

Authorized Agents

A person or entity authorized by the account owner to access account information and/or act on his or her behalf. Authorized agents may have four different levels of permissions, ranging from access to account information to the ability to change account owners and beneficiaries.


The person designated by the account owner whose higher education expenses will be paid, in whole or in part, using money from the account. The beneficiary must be a natural person, and each account may only have one beneficiary. Anyone, including the account owner, can be a beneficiary.

Community College Average Tuition Level

For the PA 529 GSP, the tuition level that is based on the average tuition at Pennsylvania's 14 community colleges: Allegheny County, Beaver County, Bucks County, Butler County, Delaware County, Harrisburg Area, Lehigh-Carbon County, Luzerne County, Montgomery County, Northampton County, Pennsylvania Highlands, Philadelphia, Reading Area and Westmoreland Area.


Money put into a 529 account. In the case of the Pennsylvania 529 Guaranteed Savings Plan, your contribution is converted into GSP Credits at a Tuition level you select by dividing the amount contributed by the GSP Credit Rate for the account's designated Tuition Level. See "GSP Credit" for more information.


The gains or losses on an investment.

Eligible Educational Institution

School eligible to participate in the federal financial aid programs.  To search for eligible schools, go to fafsa.ed.gov. It includes nearly all colleges, universities, community colleges, and law, medical or business schools. Many career or technical schools and schools abroad are eligible as well.


The difference between a contribution and the value of that contribution when withdrawn.

GSP Credit

For each contribution made to a PA 529 GSP account, a "GSP credit" is calculated. GSP credits are based on the tuition level chosen by the account owner or automatically determined by attendance of the beneficiary at a publicly funded school. Each contribution is divided by the GSP credit rate in effect at the time the contribution is made for the designated tuition level to determine the number of GSP credits for that contribution. Each time you make a new contribution, this calculation is made and the GSP credits accumulate. Please refer to the PA 529 GSP Disclosure Statement for the methodology used to determine credit rates, and the PA 529 GSP Credit Rate Schedule.

GSP Credit Rate

The rate set annually by Treasury for each Tuition Level. Each GSP credit rate is based on the actual tuition at the school or schools that make up the tuition level. It may be the same as, more than (that is, have a premium) or less than (that is, have a discount) actual tuition at the school or schools that make up the tuition level. GSP credit rates have had premiums in the past but have never had discounts.

GSP credit rates are listed on the PA 529 GSP Credit Rate Schedule. The GSP credit rate is used to determine the number of GSP credits for each contribution.

Guarantee of the PA 529 GSP

The "guarantee" of the PA 529 GSP is that when you use your account for qualified college expenses, the growth on your contributions is based on tuition increases – not on the investment performance that the GSP Fund achieved on those contributions. So if, during the time your money has been in the PA 529, tuition increases have been greater than investment performance – even if the investment value of your contributions has actually gone down – the GSP Fund is still obligated to pay for your college expenses at the tuition increase value. The GSP Fund assumes the risk, so you don't have to.

The concept behind the guarantee is that for some accounts the GSP Fund's investment performance will be greater than tuition increases, and for others it will be lower. But over the long-term and the many thousands of PA 529 GSP accounts, the gains and losses will balance out. To help make sure the plan works this way, and that the GSP Fund will be able to live up to its obligations, the PA 529 GSP is authorized to include "premiums" in setting annual GSP Credits Rates – the amount you need to contribute to equal one GSP Credit. Premiums are amounts over the actual tuition amount charged by the schools that are included in the GSP Credit Rate.

The "guarantee" is not a promise by the Commonwealth or any state agency that it will stand behind the GSP Fund if the Fund were to run out of money to meet the guarantee. The Commonwealth has no legal obligation to make good on the promise made by the GSP Fund. In other words, the guarantee is made only by the Fund itself and not by any other entity, including the Commonwealth of Pennsylvania.

Ivy League School Average Tuition Level

For the PA 529 GSP, the tuition level on which the GSP credit rate is based is the average tuition at the eight Ivy League schools: Brown, Columbia, Cornell, Dartmouth, Harvard, Princeton, University of Pennsylvania and Yale.

Maturity Period

The time between when a contribution is made to a PA 529 GSP account and when the growth on that contribution can be used. If the contribution is used to pay qualified higher education expenses, the maturity period is approximately 9 to 18 months.

Specifically, contributions made from January 1 to August 31 of one year will be available for the summer semester the next year. All contributions made from September 1 to December 31 will be available for use for the spring semester two calendar years forward.

For example, a contribution made on August 1, 2013, will be available for use with growth for the summer semester of 2014 and could be accessed when the summer semester bills are issued (customarily between March and May). A contribution made on September 1, 2013, will be available for use with growth for the spring semester of 2015 and could be accessed when the spring bills are issued (customarily in November or December).

For withdrawals not used for qualified higher education expenses (i.e., non-qualified withdrawals), the maturity period is one year from the date the contribution is credited to the account.

Since returns on contributions made into a PA 529 IP account are adjusted daily based on the returns of the financial markets, they are not subject to a maturity period.

Maximum Contributions

The Maximum Contribution Limit established for the PA 529 College Savings Program is calculated based on the current cost of five years of undergraduate tuition, mandatory fees, books, and room and board at the University of Pennsylvania and two years of graduate tuition, mandatory fees and room and board at the Wharton School of the University of Pennsylvania. The Maximum Contribution Limit may be adjusted annually, and may be changed at any time if required by federal tax law.

The Maximum Contribution Limit currently in effect is $511,758. The Maximum Contribution Limit includes the value of all PA 529 accounts for the same beneficiary, regardless of who owns the account(s).

Member of the Family

As defined under Section 529 of the Internal Revenue Code, a member of the family of a beneficiary is a person related to the beneficiary as follows:

  1. son or daughter, or a descendent of either
  2. stepson or stepdaughter, or a descendent of either
  3. brother, sister, stepbrother, or stepsister
  4. father or mother, or an ancestor of either
  5. stepfather or stepmother
  6. son or daughter of a brother or sister
  7. brother or sister of the father or mother
  8. son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law
  9. spouse of the beneficiary or of any of the foregoing individuals
  10. first cousin

For this purpose, a child includes a legally adopted child or a foster child, and a brother or sister includes a brother or sister by half-blood.

Minimum Contribution

The minimum contribution to a PA 529 GSP account is currently $15.  The minimum contribution to a PA 529 IP is $25 except for payroll deduction, which is $15.

Non-Qualified Withdrawals

Amounts in a 529 account can be withdrawn for purposes other than the payment of the beneficiary's qualified higher education expenses at an eligible educational institution. These are called non-qualified withdrawals. For the PA 529 GSP, the amount you receive may be lower for a non-qualified withdrawal than for a qualified withdrawal. In addition, the federal or state income tax treatment of non-qualified withdrawals will be less favorable, and in most instances, a penalty will be imposed.

Pennsylvania Publicly Funded Schools

State System of Higher Education

  • Bloomsburg
  • California
  • Cheyney
  • Clarion
  • East Stroudsburg
  • Edinboro
  • Indiana
  • Kutztown
  • Lock Haven
  • Mansfield
  • Millersville
  • Shippensburg
  • Slippery Rock
  • West Chester

State-Related Universities

  •  Pennsylvania College of Technology
  •  Pennsylvania State University
  •  Temple University
  •  University of Pittsburgh

Community Colleges

  •  Allegheny County
  •  Beaver County
  •  Bucks County
  •  Butler County
  •  Delaware County
  •  Harrisburg Area
  •  Lehigh-Carbon County
  •  Luzerne County
  •  Montgomery County
  •  Northampton County
  •  Pennsylvania Highlands
  •  Philadelphia
  •  Reading Area
  •  Westmoreland Area


Private Four-Year College Average Tuition level

For the PA 529 GSP, the average Tuition level on which the GSP credit rate is based at four-year private colleges located in Pennsylvania (excluding nursing schools). Although the Private Four-Year College Average is calculated by reference to Pennsylvania colleges, contributions designated for this tuition level, and the growth thereon, may be applied at any private or out-of-state eligible educational institution, whether or not it is located in Pennsylvania.

Qualified Higher Education Expenses

As defined by the Internal Revenue Code, qualified higher education expenses include tuition, room and board (with certain limitations), required books, required supplies, required equipment, mandatory fees and special needs services.

Qualified Withdrawal

Withdrawals from a PA 529 account used to pay for qualified higher education expenses.

State System of Higher Education Average Tuition Level

For the PA 529 GSP, the tuition level on which the GSP credit rate is based is the average tuition at the 14 universities in Pennsylvania's State System of Higher Education: Bloomsburg, California, Cheyney, Clarion, East Stroudsburg, Edinboro, Indiana, Kutztown, Lock Haven, Mansfield, Millersville, Shippensburg, Slippery Rock and West Chester.

Tuition Inflation

The rate at which college tuition costs increase over time.

Tuition Inflation Value (Value of Credits)

Based on tuition increases at the colleges or universities that make up the tuition level selected by the account owner. It is calculated by multiplying the number of earned GSP credits by the actual per-credit tuition or average actual per-credit tuition in effect for the academic year for which the valuation is being made. The tuition inflation value increases only when tuition increases occur at the school or schools in the selected tuition level. Generally, this occurs only once a year (effective September 1 or for payments made from an account for the fall semester) and there is no incremental growth in the tuition inflation value during the period between tuition increases. Please refer to the PA 529 GSP Disclosure Statement for the methodology used to determine credit rates, and the PA 529 GSP Credit Rate Schedule.

Tuition level

When you open a PA 529 GSP account, you will be asked to designate a tuition level on the enrollment form. When you designate a tuition level, you are choosing the type of school for which you are saving. However, you may change your choice at any time and the change is made retroactively. Additionally, your tuition level will automatically be changed for you, if needed, to match your student’s school if he or she ultimately attends a specific Pennsylvania publicly funded college or university. The Tuition Level determines the growth on your account when used for qualified higher education expenses. It determines the tuition inflation rate of growth and the tuition inflation value of the account.


Money that you take out of your 529 account. Withdrawals are either qualified or non-qualified. Qualified withdrawals are those used for qualified higher education expenses at eligible educational institutions. All other withdrawals are non-qualified.

The Pennsylvania 529 College Savings Program sponsors two plans-the Guaranteed Savings Plan (GSP) and the Investment Plan (IP). The guarantee of the PA 529 Guaranteed Savings Plan is an obligation of the GSP Fund, not the Commonwealth of Pennsylvania or any state agency. Before investing in either plan, please carefully read that plan's disclosure to learn more about that plan including investment objectives, risks, fees, and tax implications.