Tuesday, February 9, 2016

PA delays college-savings fee hikes til Sept. 12

The big fee increases for Pennsylvania's so-called 529 Guaranteed Savings Plan have been delayed until Sept. 12

PA delays college-savings fee hikes til Sept. 12


The fee increases for Pennsylvania's 529 "Guaranteed" Savings Plan have been pushed back to Sept. 12, says Pennsylvania Treasurer Rob McCord here.

McCord, elected last fall, seems to have a "Good News Only" policy for his announcements. He didn't post a public statement when he imposed higher fees on savers last month. I reported the increase Aug. 23 in my Philadelphia Inquirer column after outraged Pennsylvania parents, who had believed the state's guarantee promise, were informed of the new charges by state mail and email, and brought the higher fees to my attention.

Some Pennsylvania families who dutifully put aside money for their kids' education through the program are now being socked by unxpected fees of over $1,000 a year. I printed some of their comments in this follow-up column on Aug. 26. Scroll down to "guarantee."

I called McCord's office this morning to ask if parent and voter outrage had a role in his decision to delay the fee hikes, originally scheduled for this week. "We have been getting feedback," said Treasury spokeswoman Carrie Fischer Lepore. Some families, she said weren't getting adequate notice due to postal delays. So "we wanted to let families take advantage of lower tuition rates and premiums" before the increases take effect.

McCord raised the fees because the state's hired investment managers who invest parents' savings lost a lot of money when markets fell last year. As I noted in my Aug. 30 column (see "McCord"), some of those managers have given money to McCord and other state officials for their political campaigns - a practice the SEC wants to stop.

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About this blog

PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, 215.854.5194, @PhillyJoeD. Read his blog posts at http://www.philly.com/PhillyDeals and his Inquirer columns at http://www.philly.com/philly/columnists/joseph-distefano/. Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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