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Frequently Asked Questions
What is nowU?
What is the Pennsylvania 529 Guaranteed Savings Plan? What are the income tax benefits of investing in the Pennsylvania 529 GSP? What are the gift and estate tax benefits of investing in the Pennsylvania 529 GSP account? Will owning a 529 plan affect the beneficiary's eligibility for financial aid? What are qualified education expenses? What are eligible educational institutions? Why should I consider the Pennsylvania 529 GSP? Who may open a Pennsylvania 529 GSP account? Who can be a Beneficiary of a Pennsylvania 529 GSP account? Who may contribute to a Pennsylvania 529 GSP account? How much can I contribute to the account? How do I send in money? I've noticed that when I send mail regarding my nowU Pennsylvania 529 GSP account, it goes to Massachusetts, not Pennsylvania. Wouldn't it be more direct to send it in-state? How do I access funds in my account to pay a school? What will it cost? What if I am not a Pennsylvania resident? How do I enroll in the Pennsylvania 529 Guaranteed Savings Plan? What is nowU?
The nowU Pennsylvania College Savings Program (nowU) is sponsored by the Commonwealth of Pennsylvania and administered by the Treasury Department to help families save for college. By providing information and answers to your questions, nowU can help you move with confidence toward your college savings goal. One of the core college savings plans that nowU offers is the Pennsylvania 529 Guaranteed Savings Plan (GSP).
What is the Pennsylvania 529 Guaranteed Savings Plan (GSP)?
It is a tax-advantaged and low risk 529 plan intended to help individuals or
families save for college. It is a program sponsored by the Commonwealth of Pennsylvania
and administered by the Treasury Department. The GSP guarantees that your account will
keep pace with tuition inflation at a Tuition Level you choose.* More info
The basic idea with the GSP is that if you save enough to pay for a semester of college or career school today, you are guaranteed to have enough to pay for a semester of college or career school tomorrow. (Some restrictions apply. See the Program Description for details.)
In order to enroll in the GSP, the Account Owner or Beneficiary must be a resident of Pennsylvania (as well as U.S. citizen or resident alien).
Return to Top What are the income tax benefits of investing in a Pennsylvania 529 GSP account?
What are the gift, estate, and inheritance benefits of investing in a Pennsylvania 529 GSP account?
Return to Top Will owning a nowU GSP Account affect the beneficiary's eligibility for financial aid?
State financial aid - A nowU account is not included in determining eligibility for Pennsylvania state financial aid programs. Other 529 plans are. If you or the beneficiary is not a Pennsylvania resident, check with your state to determine its requirements.
Federal financial aid - Your nowU account affects the beneficiary's eligibility for federal financial aid in the following ways:
What are qualified education expenses?
Withdrawals from a GSP account are tax-free when they are used to pay for qualified education expenses. These are defined by the Internal Revenue Code to include the following:
Return to Top What are eligible educational institutions?
Nearly all colleges, universities, community colleges, law, medical or business schools qualify. Many career or technical schools and schools abroad are eligible as well. The school must be eligible to participate in the federal financial aid programs. For a list of schools, see www.fafsa.ed.gov/FOTWWebApp/FSLookupServlet
Why should I consider the Pennsylvania 529 GSP?
You can move closer to making college possible by saving in the GSP. Sponsored by the Commonwealth of Pennsylvania, the GSP is the tax-smart, guaranteed way to save for college. Some of the benefits of the plans include:
Who may open a Pennsylvania 529 GSP account?
Any U.S. citizen or resident alien with a valid Social Security number or taxpayer identification number who is 18 years of age or older with a permanent address that is not a PO Box may open a GSP account. A corporation, non-profit organization or, or trust may also open an account. Either the Account Owner or the Beneficiary needs to be a Pennsylvania resident at the time the account is opened.
Who can be a Beneficiary of a Pennsylvania 529 GSP account?
The Beneficiary is the person for whom the Account Owner is saving. Anyone, including the Account Owner can be a Beneficiary. Only one beneficiary may be designated per account, but an individual may be the designated beneficiary of more than one account. Either the Account Owner or the Beneficiary needs to be a Pennsylvania resident at the time the account is opened.
Return to Top Who may contribute to a Pennsylvania 529 GSP account?
Anyone-parents, grandparents, aunts, uncles - even family friends.
How much can I contribute to the account?
The initial minimum and subsequent investments to your account is $25. By law, the maximum lifetime amount that can be contributed to one Beneficiary from all sources, including accumulated growth, is $368,600. Once your accrued account balance reaches this limit, no additional contributions are allowed. This maximum applies to all nowU Program accounts established for the same Beneficiary, regardless of whether they are owned by different Account Owners.
Return to Top How do I send in money?
Contributions can be made by:
Return to Top I've noticed that when I send mail regarding my nowU Pennsylvania 529 GSP account, it goes to Massachusetts, not Pennsylvania. Wouldn't it be more direct to send it in-state?
The nowU Pennsylvania 529 GSP is administered by Upromise Investments, Inc., which is located in Massachusetts. Upromise was chosen as the plan administrator in 2006 after a competitive bidding process. The company has a large processing center and specialized back-office technology to process large quantities of mail and investor requests.
Return to Top How do I access funds in my account to pay a school?
The nowU program tracks the beneficiary's estimated date of enrollment (based on what is submitted on the enrollment application) and when our records indicate the beneficiary should be ready to attend school for the first time, we will initiate contact via the mail.
The first items you will receive, the Account Attendance and Verification form and Private Out-of-State form, will be sent in the beginning of May. These forms will ask what school the beneficiary is attending and if you plan on using funds for the upcoming semester. Once you return these forms and if you indicated you want to use credits, we will update your account so that you automatically receive the Payment Authorization form. Payment Authorization forms are sent automatically every Fall and Spring semester until your account has a zero balance. Fall forms are sent after the schools update and certify their tuition for the following year (usually mailed late July) and the Spring forms are sent in November. On the Payment Authorization, you will detail how much (in dollars) you want to use and where you want the money sent. The form is broken down in to four sections: 1) Tuition, mandatory fees and on-campus room and board, 2) books and required supplies, 3) off-campus room and board, and 4) special needs. You will indicate how much, if any, that you want to use for each of these items and where you want the money to be sent (you, school or a third party). You must return these forms with a copy of the itemized tuition bill from the school. It takes about 14 days to process a payment, so please allow adequate time if you are requesting payment to the school. Return to Top What will it cost?
You may open an account with as little as $25 and make minimum subsequent contributions of $25 whenever you want. Make saving even easier by setting up automatic payroll deduction or deductions from your bank account.
The GSP has low fees. A one-time enrollment fee of $50 is charged. But a discount to just $25 is available with the coupon enclosed with the Enrollment Guide or by enrolling online . Additional discounts may be available through your employer or your child's school. And, the enrollment fee is waived if an account is opened within six months of a child's birth or adoption. There is an annual $25 account maintenance fee that is waived for accounts with automatic payroll deduction or automatic deduction of at least $25 per month from your bank account. Return to Top What if I am not a Pennsylvania resident?
In order to establish a Pennsylvania 529 GSP account, either the Account Owner or the Beneficiary must a Pennsylvania resident. If you are not a Pennsylvania resident, look into whether your state offers its own 529 plan. If so, consider whether the benefits it offers to residents outweigh benefits offered by the Pennsylvania 529 GSP.
How do I enroll in the Pennsylvania 529 Guaranteed Savings Plan (GSP)?
You may enroll online , or call 800-440-4000, Monday through Friday, 8:00 a.m. to 6:00 p.m. Eastern time to request an enrollment kit.
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The availability of tax or other benefits may be contingent on meeting other requirements. Withdrawals, or a portion of withdrawals not used for qualified education expenses, may be subject to federal income tax and a 10 percent federal penalty tax, as well as state and local income taxes.
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In the event the donor does not survive the five-year period, a pro-rated amount will revert to the donor's taxable estate.
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