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FOR IMMEDIATE RELEASE
March 3, 2008

A Capitol Perspective
A column by State Senator Pat Browne
16th Senatorial District

nowU Helps Families Prepare for College Costs

There are many ways that parents can prepare for the financial burden of sending their children to college. The simplest method would be for them to put $10 away every day from birth until the child reaches age 18. By the end, they, hopefully, will have just about enough money saved up to cover the costs of a four-year stint at college.

That's right, 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.

We all know that stashing money away may be simplest, but it certainly isn't the easiest way to prepare for college costs. 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. I strongly 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).

State Senator Pat Browne represents the 16th Senatorial District and serves as Chairman of the Senate Finance Committee.