A pilot program designed to encourage Pennsylvania parents to invest early in their child’s pursuits after high school has been successful as preliminary results trickle in, a state official said.
Data from state Treasurer Joe Torsella’s office linked a test rollout of the Keystone Scholars initiative to an increased likelihood of making continued contributions into a college and career savings account through the PA 529 program.
At the beginning of 2018, Torsella’s office launched Keystone Scholars in Delaware, Elk, Indiana, Luzerne, Mifflin and Westmoreland counties. The program was expanded statewide a year later.
At its core, Keystone Scholars provides parents with the opportunity to obtain a $100 starter deposit into a PA 529 account. In the pilot program, parents had until the child’s first birthday to claim the funds as a first step in opening the account. Moving forward, with the statewide rollout, families no longer have to take any immediate steps to enroll.
Once a child comes of age, PA 529 funds can be used for a range of postsecondary expenses, including tuition at trade schools, vocational programs, community college and universities. The initial $100 and any accompanying interest must be used by the time the child recipient is age 29. Any additional money saved within an account can be used at any time, regardless of age.
According to data crunched from Torsella’s office, 18.1 percent of parents in the six pilot counties claimed the $100 within the first 22 months of the pilot’s initial launch. Participation ranged from 16 percent in Luzerne County to 28 percent in Elk County.
In a news release distilling the first batch of figures, Torsella said the participation levels are encouraging.
“The data shows that families are using this jump-start to continue saving through childhood,” Torsella said. “I’m proud of the positive impact that Keystone Scholars is having on families, and thankful to the Pennsylvania General Assembly and Gov. [Tom] Wolf for expanding this program statewide.”
In a follow-up email interview with The Center Square, Torsella said the pilot phase of the project was done methodically to gauge its potential for success in the years ahead.
“The six counties were chosen for their unique mix of rural, urban and suburban populations as representing Pennsylvania more broadly,” Torsella said.
As with any launch program, Torsella said getting the word out about Keystone Scholars’ existence has been an undertaking. He credited several sources – including hospitals, daycare centers and children’s programs – with being a part of the collaborative effort.
Since its unveiling, Torsella said Keystone Scholars has not been funded through taxpayer dollars. Rather, $2 million in philanthropic contributions have been funneled into the initiative. Surplus earnings within the state also have gone into the program.
When the governor signed Keystone Scholars into law, making it a statewide program at the beginning of the year, it came with the caveat of expiring at the end of 2029.
“We are certainly hopeful that Keystone Scholars will continue in perpetuity,” Torsella said. “Sens. Vincent Hughes (D-Philadelphia) and John Gordner (R-Bloomsburg) were key legislative partners in the passage of Keystone Scholars, for the good reason that it has the potential to pay significant long-term dividends.”