Study Finds Rural-Urban Gap in Investing in Pa’s Education Savings Accounts

Families living in rural Pennsylvania are putting less money in state savings accounts for post-secondary education for their children’s future than those living in urban areas, according to a study released Monday.

Analysis by the Center for Rural Pennsylvania found that 84% of the more than 244,000 beneficiaries of Pennsylvania’s 529 (post-secondary educational savings accounts) as of March 2022 resided in urban counties. Center designates counties as urban with at least 291 people per square mile.

Nationwide, the average number of 529 plan beneficiaries per 1,000 inhabitants is 18.8. However, there is a significant gap in the breakdown between urban and rural counties.

In the state’s 19 urban counties, that number is 21.4 per 1,000, while in rural counties it’s almost as low as 11.5 per 1,000, said the center’s executive director, Kyle Kopko.

In south-central Pennsylvania, the study found that Cumberland County had 30.4 beneficiaries per 1,000 residents; Dauphin County, 20 beneficiaries per 1,000; Perry County had 14.5 per 1,000, York County had 17.4 per 1,000; and Lebanon County with 14.3 per 1,000 people

“This underscores the need to better reach our rural communities,” said State Treasurer Stacy Garrity, whose department requested the study.

She said since taking office in 2021, she’s made outreach to rural areas a priority and hired four employees to help increase visibility of the state’s two post-secondary austerity programs in those parts of Pennsylvania.

“This report shows we’re doing the right thing by expanding our reach into our rural counties, which are all too often forgotten in Harrisburg,” said Garrity, a lifelong resident of Bradford County, one of the state’s more rural counties.

The Treasury offers a Guaranteed Savings Plan, which allows families to save at current tuition rates to cover future tuition costs, and an Investment Plan, which offers a variety of investment opportunities.

Sen. Gene Yaw, R-Lycoming County, who serves as chair of the center’s board of directors, said funds saved in these accounts can be used for educational opportunities other than four-year colleges. He said it could be used in trade schools, community colleges and other types of post-secondary programs to prepare workers for the existing job openings.

“Everywhere we go, we have jobs, but we don’t have people trained to fill those jobs, and that’s a big concern for me,” Yaw said.

“The 529 Plan is a way for even people of modest means to pay for this education in a timely manner,” added Rep. Eddie Day Pashinski, D-Lucerne County, vice chairman of the center.

The study found that between January 2018 and March 2022, contributions to rural accounts averaged $56 less per quarter than their urban counterparts.

The good news in the report, Kopko said, is that contributions to 529 accounts increased in the period from 2018 to March 2022 even after accounting for inflation, but again, the rate of increase was stronger in urban areas than in rural ones.

Garrity said the Keystone Scholars Program has helped increase participation in the 529 programs overall and in nearly all rural counties and among low-income families. This program provides $100 for each baby born or adopted by families in Pennsylvania in an account linked to a 529 program.

‚ÄúResearch shows that if their parents have even a small amount of money set aside for future education, their parents are more likely to expect their children to want to go to college after high school, and in turn they are more likely to pursue post-secondary education. ” She said.

Garrity has visited all 67 counties in the state in each of the past two years and said she touted the education savings programs at each stop.

“I am committed to ensuring that every corner of the state understands the benefits of PA 529,” she said.

Jan Murphy can be reached at [email protected]. Follow her on Twitter at @JanMurphy.