Pennsylvania College Savings Program

Glossary

529 College Savings Plans	Programs sponsored by the states (or colleges) and recognized under Internal Revenue Code Section 529.
Account Owner	The Account Owner is the person who opens an Account with a 529 college savings plan and controls the assets held in the Account.
Beneficiary	The Beneficiary (intended future student) is the person designated by the Account Owner whose higher-education expenses will be paid, in whole or in part, using money from the Account. The Beneficiary must be a natural person, and each Account may only have one Beneficiary. Anyone, including the Account Owner, can be a Beneficiary.
Contribution	This is money put into a 529 account.
Earnings	The growth generated by an investment.
Eligible Educational Institution	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.
Growth	The difference between a contribution and the value of that contribution when withdrawn.
GSP Credit Rate	A GSP Credit Rate is the rate set annually by the Department for each Tuition Level. Each GSP Credit Rate is based on the actual tuition at the school or schools comprising the Tuition Level. It may be the same as, more than (that is, have a premium) or less than (that is, have a discount) actual tuition at the school or schools comprising the Tuition Level. GSP Credit Rates have had premiums in the past but have never had discounts. For academic year 2007-08, GSP Credits Rates are the same as actual tuition.
Guarantee of the GSP	In the Pennsylvania 529 Guaranteed Savings Plan, the guarantee is that, when used for qualified higher education expenses, your contributions will grow at the rate of tuition inflation at a Tuition Level that you choose. If the applicable GSP Credit Rate at the time a contribution is made has a premium, however, your rate of growth will be lower than the actual rate of tuition inflation at your Tuition Level by approximately the rate of the premium. Premiums do not, however, alter the way in which the dollar value of your account is determined. When used for qualified higher education expenses, each GSP Credit will still have the full value of the actual per credit tuition cost. The guarantee is an obligation of the Pennsylvania GSP Fund only. The guarantee is not backed by the full faith and credit of the Commonwealth of Pennsylvania, and is not an obligation of the Commonwealth of Pennsylvania, the Pennsylvania Treasury Department, Upromise Investments, Inc., Upromise Investment Advisors, LLC, or any other party. The GSP is not insured by the Federal Deposit Insurance Corporation or any other government agency.
Maximum Contribution	The Maximum Contribution Limit established for the Pennsylvania 529 College Savings Program currently calculated based on the current cost of five years of undergraduate tuition, mandatory fees, books and room and board costs at the University of Pennsylvania and two years of graduate tuition, mandatory fees and room and board costs at the Wharton School of the University of Pennsylvania. The Maximum Contribution Limit may be adjusted annually, and may be changed at any time if required by federal tax law. The Maximum Contribution Limit currently in effect is $368,600 . The Maximum Contribution Limit includes the value of all nowU Pennsylvania 529 College Savings Program accounts for the same beneficiary, regardless of who owns the account(s).
Member of the Family	As defined under Section 529 of the Internal Revenue Code, a member of the family of a Beneficiary is a person related to the Beneficiary as follows: (i) son or daughter, or a descendent of either; (ii) stepson or stepdaughter, or a descendent of either; (iii) a brother, sister, stepbrother or stepsister; (iv) the father or mother, or an ancestor of either; (v) a stepfather or stepmother; (vi) a son or daughter of a brother or sister; (vii) a brother or sister of the father or mother; (viii) a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law; (ix) the spouse of the Beneficiary or of any of the foregoing individuals; or (x) a first cousin. For this purpose, a child includes a legally adopted child and a foster child and a brother or sister includes a brother or sister by half-blood.
Non-Qualified Withdrawals	Amounts in a 529 account can be withdrawn for purposes other than the payment of the beneficiary's qualified higher education expenses at an eligible educational institution. These are called non-qualified withdrawals. For the GSP, the amount you receive may be lower for a non-qualified withdrawal than for a qualified withdrawal. In addition, for both the GSP and the Investment Plan, the federal or state income tax treatment of non-qualified withdrawals will be less favorable.
Qualified Higher-Education Expenses	As defined by the Internal Revenue Code, qualified higher education expenses include tuition, room and board (with certain limitations), required books, required supplies, required equipment, mandatory fees and special needs services.
Qualified Withdrawal	Withdrawals from a 529 account used to pay for qualified higher-education expenses.
Successor Owner	The person (including a natural person, corporation, association, partnership or other legal entity) whom the Account Owner designates to assume ownership of the account in the event the Account Owner dies or becomes incapacitated.
Tuition Inflation	The rate at which college tuition increases over time.
Tuition Level	When you open a GSP 529 Account, you will be asked to designate a Tuition Level on the enrollment form. When you designate a Tuition Level, you are choosing the type of school for which you are saving. However, you may change your choice at any time and the change is made retroactively. Your choice determines the growth on your GSP Account when used for qualified higher education expenses. It determines the Tuition Inflation Rate of growth and the Tuition Inflation Value of the Account.
Withdrawal	Money that you take out of your 529 account. Withdrawals are either qualified or non-qualified. Qualified withdrawals are those used for qualified higher-education expenses at eligible educational institutions. All other withdrawals are non-qualified.